Law of Agency Champions 2018
The TAR Independent Contractor Agreement for Sales Associates: a. Gives the associate the authority to sign listing agreements on the broker's behalf b. Creates a partnership between the parties c. Grants ownership of listings to the sales associate d. All of these are correct
(a) Gives the associate the authority to sign listing agreements on the broker's behalf
Broker Susan is representing the seller and Broker Daniel is working with a buyer customer. Susan is representing the seller. Who is Daniel representing? a. The seller b. The buyer and seller c. His own firm d. The buyer only
(a) The seller
________________ as a meeting or written communication that involves a substantive discussion that relates to a specific property.
"substantive dialogue"
When an agent and potential party enter into a _________________discussion of a real estate transaction, the party must be provided with a TREC-prescribed agency information form
"substantive"
The agent for the buyer is called ______________
"the buyer's agent."
According to the Fair Labor Standards Act (FLSA), the term "employ" includes
"to suffer or permit to work."
A(n) _________ is a contract between an insurance company and a broker/license holder. (a) Errors and Omissions policy (b) HOA (c) Policy and procedure manual (d) Demographic farm
(a) Errors and Omissions policy
On signs or any other type of advertising, a broker's name, the brokerage name, or an assumed name has to be at least ___________________________
50% of the largest item of contact information.
How many inspectors should a license holder recommend to a buyer?
Atleast 3
What are some Hazardous substances & Conditions?
Mold Radon Asbestos UFFI - Urea Formaldehyde Foam Insulation Lead Landfills or Waste disposal sites Underground storage fuel tanks Farming herbicides and pesticides EMFs - Electromagnetic Fields
A property can be stigmatized for a number of reasons:
Murder on the premises Death on the property Suicide Infectious Disease Criminal Activity Property Conditions issues Paranormal Activity
Are oral agreements binding when attempting to collect commission?
NO, you must prove you were employed. This must be in WRITING.
The real estate broker's commission is the difference between the minimum net established by the seller, and the price that the buyer is willing to pay.
Net listing
Does a WITHDRAWAL terminate a listing?
No
Can a someone hold both Sales Agents License and Brokers License?
No, but a broker can act as a sales agent under a brokers license.
Does a Seller or Seller's agent have to disclose that a death by natural causes took place in the house? Example Suicide, accident unrelated to the condition of the home, HIV or AIDS
No, this does not have to be disclosed
What is the acronym that describes FIDUCIARY DUTIES and RESPONSIBILITIES?
OLDCAR
The seller can list his or her property with multiple competing brokers.
Open listing
______________ exists when actions lead another person to assume that one is an agent
Ostensible agency
Which statement is incorrect? (a) There can be two intermediaries in the same transaction. (b) More than one associated license holder can be appointed by the Intermediary to work with the same party (c) Disclosure of agency may be oral or in writing (d) All of these statements are incorrect
(a) There can be two intermediaries in the same transaction.
Intermediary with appointments requires that the broker sponsor at least ______ agents. (a) Two (b) Five (c) Ten (d) Twelve
(a) Two
When does the Intermediary process begin? (a) When the buyer is ready to make an offer on a broker's listing (b) When a buyer contacts a broker (c) When a seller lists his property with a broker (d) When a buyer views a broker's listing
(a) When the buyer is ready to make an offer on a broker's listing
Which statement is correct? (a) Only the broker can terminate the Independent Contractor Agreement for Sales Associate (b) Only the agent can terminate the Independent Contractor Agreement for Sales Associate (c) Either party may terminate with or without cause, at any time (d) Either party may terminate only with proof of cause
(c) Either party may terminate with or without cause, at any time
License holders must not disclose whether or not a former tenant had ___________ to potential buyers. (a) Pets (b) Children (c) AIDS or an HIV-related disease (d) All of these are correct
(c) AIDS or an HIV-related disease
Which of the following is NOT prohibited by the Texas Real Estate License Act? (a) Commingling (b) Conversion (c) Confidentiality (d) Undisclosed Intermediary
(c) Confidentiality
For a broker to represent the owner: (a) The broker becomes the buyer's agent by entering into an agreement with the buyer (b) The broker's commission is set by TREC (c) The broker becomes the owner's agent by entering into an agreement with the owner (d) All of these are correct
(c) The broker becomes the owner's agent by entering into an agreement with the owner
Which of the following requires a Seller's Disclosure of Property Condition be filled out by the seller and provided to the buyer? (a) Most residential properties (b) FSBOs (c) A REALTOR selling his home to another REALTOR (d) All of these require a Seller's Disclosure of Property Condition
(d) All of these require a Seller's Disclosure of Property Condition
Which of the following statements is true? (a) The first two or three transactions new real estate professionals usually close are with a buyer (b) Buyers have a timeline to buy a home (c) Agents should limit the amount of buyers that they work with to 3 at a time in order to effectively manage their time (d) All of these statements are true
(d) All of these statements are true
Which of the following statements should a license holder only say AFTER a Buyer's Representation Agreement has been signed? (a) "My professional opinion is that the market value of this property is $350,000." (b) "I will write up the offer of $347,000 for you at my office." (c) "It is my professional opinion that this house is overpriced for the neighborhood." (d) All of these statements should be made after a Buyer's Representation Agreement has been signed.
(d) All of these statements should be made after a Buyer's Representation Agreement has been signed.
How many properties should an Agent find in MLS when preparing a Comparative Market Anaylsis(CMA)?
3 of each: 3- Recently Sold 3 - Recently Listed 3 -Recently Expired
What is mold?
are fungi that can be found both indoors and outdoors
Which of the following is true regarding Intermediary rules for a transaction? a. The transaction must be an in-house sale b. Both sides of the transaction must be clients of the broker c. The broker must have written consent from both parties d. All of these are correct
d. All of these are correct
According to DTPA, trade and commerce includes the ___________ of any good or service affecting the people of Texas. a. Advertising b. Distribution c. Offering for sale or lease d. All of these are included in the DTPA under trade and commerce
d. All of these are included in the DTPA under trade and commerce
An agent may not deceive or defraud a customer
Honest dealing
Exemplary damages are often referred to as _______________________
punitive damages.
An assertion or statement by words or conduct that is not in accordance with the facts.
Misrepresentation
What type of listing gives the broker the commission regardless if the property is sold by the seller?
Exclusive Right to Sell
The seller lists the property with only one broker, but can sell it him or herself without paying a commission.
Exclusive agency
TREC has opined over the years that the word ______________ or ______________ are words that clearly identify the advertiser as a broker
"REALTOR®" "Realty"
The cost for each associate is known as
"desk cost".
Another name for a special agency is ______________
"limited agency."
The agent who lists a seller's property for sale is called the __________________
"listing agent"
the time you are answering the telephone when a prospect calls your company with a real estate need is called?
"property time" or "phone time" or "opportunity time".
Fraud in a transaction involving real estate or stock in a corporation or joint stock company consists of a
(1) false representation of a past or existing material fact, (2) false promise to do an act,
A broker may act as an intermediary between parties to a real estate transaction if:
(1) the broker obtains written consent from each party (2) the written consent of the parties states the source of any expected compensation to the broker.
Each advertisement must include the following in a readily noticeable location in the advertisement these 2 thing
(1) the name of the license holder or team placing the advertisement; and (2) the broker's name in at least half the size of the largest contact information for any sales agent,
TREC rules require that most records for brokerage firms be retained for at least ______ years. (a) 4 (b) 6 (c) 10 (d) 25
(a) 4
Best practices to avoid a DTPA suit state that an agent should give a list of _________ inspectors to the buyer and have the buyer choose the inspector. (a) At least 3 (b) 10 or more (c) All licensed (d) At least 1
(a) At least 3
Any stigma that relates to a material defect in a property must be ________. (a) Disclosed (b) Hidden (c) Psychological (d) Ignored
(a) Disclosed
Which of the following is not one of the 4 statutory agency relationships allowed in Texas? (a) Dual Agency (b) Seller Agency (c) Buyer Agency (d) Intermediary
(a) Dual Agency
Which of the following is NOT one of the 5 sources of ethical standards discussed in the text? (a) Hammurabi's Code (b) The Common Good Approach (c) The Virtue Approach (d) The Rights Approach
(a) Hammurabi's Code
In Texas, there is no _______ agency relationship with any party to a transaction. a. Implied b. General c. Special d. Universal
(a) Implied
Which statement regarding DTPA is FALSE? (a) Intent is the most important determinant under DTPA (b) DTPA provides for 3 times economic damages if conduct is found to be intentional and/or knowing (c) Trade and commerce include advertising, selling, leasing, and distributing goods or services (d) All of these statements are false.
(a) Intent is the most important determinant under DTPA
When a broker in Texas represents both the buyer and the seller, the broker is a(n) _____________. (a) Intermediary (b) Dual agent (c) Appointed broker (d) Ostensible agent
(a) Intermediary
The commission charged is negotiated between the __________ and the __________. (a) Seller, broker (b) Seller, TREC (c) Broker, TREC (d) Listing agent, regional brokerage firms
(a) Seller, broker
All listing agreements must have a definite ______ date. (a) Termination (b) Sell by (c) Maturity (d) Beginning
(a) Termination
The Deceptive Trade Practices Act is found in the ___________. a. Texas Business and Commerce Code b. Rules of the Commission c. Texas Real Estate License Act d. Texas Insurance Code
(a) Texas Business and Commerce Code
TREC has included ______________________ for real estate license holders in the Rules of the Commission. (a) The Canons of Professional Ethics and Conduct (b) Pachelbel's Canon (c) The NAR Code of Ethics (d) Texas Ethical Competency and Practices
(a) The Canons of Professional Ethics and Conduct
Which TREC-promulgated contract contains a fee-sharing agreement? (a) The Farm and Ranch Contract (b) The One-to-Four Family Residential Contract (c) The Residential Condominium Resale Contract (d) All of these contain a fee-splitting agreement
(a) The Farm and Ranch Contract
Agent Shonda's friend, Katrina, wants to sell her house and invites Shonda out for happy hour to discuss the property. Katrina lists one of the reasons for the sale is that she and her spouse are divorcing. As a friend, Shonda lends her a sympathetic ear. As a real estate agent who has not signed an agency agreement with Katrina, Shonda: (a) Should propose an oral listing agreement with Katrina (b) Has created a liability for her broker by learning confidential information from an unrepresented customer without a written agreement (c) Can assume that the agency agreement with Katrina is implied (d) Should offer Katrina legal advice on her divorce and community property laws.
(b) Has created a liability for her broker by learning confidential information from an unrepresented customer without a written agreement
If a sales agent signs the Independent Contractor Agreement for Sales Associate, he or she (a) Is obligated to attend all brokerage meetings (b) Is not required to be present in the broker's office (c) Is not responsible for his or her association dues and licensing fees (d) Becomes an employee of the broker
(b) Is not required to be present in the broker's office
Steven, a sales agent, signed an Independent Contractor Agreement with broker Jean-Yves. Jean-Yves is now Steven's ____________. (a) Client (b) Principal (c) Employer (d) Consultant
(b) Principal
A license holder is not required to provide the IABS when the license holder meets with a party who is: (a) Not represented (b) Represented by another license holder (c) A family member (d) Renting for 2 years or more
(b) Represented by another license holder
A REALTOR should fill out a(n) ___________ if there is any increase or decrease in the listing price of a property. (a) TAR Exclusive Agency Addendum (b) TAR Amendment to Listing (c) Seller's Disclosure of Property Condition (d) Seller's Authorization to release certain information
(b) TAR Amendment to Listing
Which of the following acts would be considered a violation under DTPA? (a) Telling a potential buyer that the roof is in "like new" condition (b) Telling a potential buyer that wood floors were original to the house when they were not (c) Disclosing that a refrigerator was reconditioned (d) None of these
(b) Telling a potential buyer that wood floors were original to the house when they were not
The seller, as a customer, is in a(n)___________ relationship with the broker until he or she becomes a client. (a) Agency (b) Third-party (c) Secret (d) Personal
(b) Third-party
Illegal private conspiracies and combinations formed to eliminate or minimize competition in an industry is known as: (a) Privateering (b) Unfair business practices (c) Poaching (d) Corporate takeovers
(b) Unfair business practices
When may Broker Jeff act as an intermediary according to the TREC IABS form? (a) When he sponsors more than 5 agents (b) With written consent from the parties (c) With either written or verbal consent from the parties (d) If the price of the property is less than $300,000
(b) With written consent from the parties
Which statement regarding the TAR Seller's Disclosure Notice is FALSE? (a) The seller is responsible for filling out the form to the best of his or her knowledge. (b) The seller should include all defects and repairs that he or she is aware of. (c) If the seller is unsure about the condition or status of an item on the checklist, then he or she should just leave it blank. (d) All of these statements are false.
(c) If the seller is unsure about the condition or status of an item on the checklist, then he or she should just leave it blank.
Which of the following statements is correct? (a) Property mangers do not need to have a real estate license. (b) Unlicensed assistants can show property for an agent. (c) In order to perform all common duties, a property managers must be licensed by the state. (d) Unlicensed assistants cannot show a property, but can open a door for prospective buyers and tenants.
(c) In order to perform all common duties, a property managers must be licensed by the state.
What does Article 1 of the Canons of Professional Ethics and Conduct of Real Estate License Holders say? (a) License holders must be competent (b) License holders must not discriminate in the sale or lease of housing (c) License holders must be scrupulous and meticulous while performing their duties (d) All of these are included under Article 1
(c) License holders must be scrupulous and meticulous while performing their duties
The duties of the agent to the principal can be remembered by using the acronym: (a) PETE (b) NEWCAR (c) OLDCAR (d) HOTROD
(c) OLDCAR
_________ uses adjectives and opinions rather than details or facts and is not considered misrepresentation. (a) Phishing (b) Commingling (c) Puffing (d) Pyramiding
(c) Puffing
A broker who acts as an intermediary in a transaction: (a) May disclose that the owner will accept a price less than the asking price if he or she feels that it is the right thing to do (b) May disclose any confidential information that he or she deems will help sell the property (c) Shall treat all parties honestly (d) All of these are correct
(c) Shall treat all parties honestly
A buyer is: (a) Anyone wanting to view homes (b) Someone who wishes to list a home with a broker (c) Someone who wants to buy a home and is on a timeline to do so (d) None of these are correct
(c) Someone who wants to buy a home and is on a timeline to do so
When the broker is given notice of termination, the broker must:
1. Cease all marketing activities. 2. Remove signs and lockboxes. 3. Remove the listing from websites and other advertising media. 4. Terminate the listing in the MLS.
Which of the following is NOT an advantage of a brokerage policy of Seller Agency Only - No Intermediary? a. The broker does not have to make appointments b. The broker and agents are free to negotiate for the seller without conflict of interest c. The broker collects both selling and buying commissions d. All of these are advantages of Seller Agency Only
(c) The broker collects both selling and buying commissions
The listing side of a transaction occurs when: (a) The property is sold by a firm other than the listing firm (b) The buyer retains the services of a broker (c) The seller retains the services of a broker (d) None of these are correct
(c) The seller retains the services of a broker
Subagency is: (a) When a broker appoints associates to the selling side and the listing side of an in-house sale (b) Outlawed in Texas (c) When a license holder not associated with the seller's broker is representing the seller through a cooperative agreement with the seller's broker (d) When one agent at a brokerage firm takes over when the listing agent is sick or on vacation
(c) When a license holder not associated with the seller's broker is representing the seller through a cooperative agreement with the seller's broker
If a broker _______, it is not a violation of federal law. (a) attempts to fix prices (b) limits competition by assigning market areas (c) negotiates commission rates with clients (d) boycotts discount brokers
(c) negotiates commission rates with clients
When an agent and potential party enter into a ____________ discussion of a real estate transaction, the party must be provided with a TREC-prescribed agency information form.First contact / orally or written a. "written-only" b. "orally only" c. "face-to-face" d. "substantive"
(d) "substantive"
Which specialization has a tendency to use oral agreements over written on both sides of the transaction? (a) Farm and ranch transactions (b) Commercial sales (c) Commercial leasing (d) All of these
(d) All of these
Which of the following actions creates risk for the broker? (a) Mishandling trust funds (b) Unintentionally creating an unwritten agency relationship with a potential buyer/seller (c) Failing to give the proper disclosures in a timely manner (d) All of these actions create risk for the broker
(d) All of these actions create risk for the broker
A common misconception regarding agency is that: (a) Confidential information about a client is only confidential during the course of the agency agreement. (b) Senate Bill 489 ended subagency in the state of Texas and replaced it with Intermediary. (c) The selling side of a transaction is the side in which the agent works with the seller. (d) All of these are common misconceptions
(d) All of these are common misconceptions
What are the duties and obligations of an Intermediary? (a) To treat all parties fairly (b) To decide whether or not to appoint associates (c) To obtain written consent from both parties to act as Intermediary (d) All of these are duties and obligations of an Intermediary
(d) All of these are duties and obligations of an Intermediary
Under DTPA a residence is defined as: (a) A single-family house (b) A unit in a multi-unit complex (c) A condominium or cooperative system (d) All of these qualify as a residence under DTPA
(d) All of these qualify as a residence under DTPA
What are the types of LISTING AGREEMENTS?
1. Open listing 2. Exclusive agency 3. Exclusive right to sell 4. Net listing
Which of the following addenda is pre-checked in the TAR Buyer's Representation Agreement? (a) Information Concerning Property Insurance (b) Lead-Paint Addendum (c) Protecting Your Home From Mold (d) Information About Brokerage Services
(d) Information About Brokerage Services
Any dispute arising under the contract that cannot be resolved through informal means will be submitted to _________ prior to resorting to arbitration or litigation. (a) A jury (b) An administrative Law Judge (c) The local board of REALTORS® (d) Mediation
(d) Mediation
Fee-splitting arrangements between brokers are often established in the __________. (a) Buyer's Representation Agreement (b) Seller's Disclosure (c) Texas Real Estate License Act (d) Multiple Listing Service
(d) Multiple Listing Service
Which of the following would NOT be an example of Reasonable Care? (a) Helping the client meet contract deadlines (b) Assisting the seller to arrive at a reasonable listing price (c) Recommending the use of independent advisers when appropriate (d) Not making the buyer client aware of new listings coming on the market so that he can focus on one listing at a time
(d) Not making the buyer client aware of new listings coming on the market so that he can focus on one listing at a time
The IRS requires that independent contractors pay a deposit for the agent's estimated tax liability on a _________ basis. (a) Monthly (b) Semi-annual (c) Yearly (d) Quarterly
(d) Quarterly
___________ prohibits undisclosed referral fees and kickbacks. (a) Sherman Anti-Trust Act (b) Errors and Omissions Insurance (c) Fair Housing Law (d) RESPA
(d) RESPA
___________ requires that TREC investigate complaints against license holders according to a risk-based approach. a. The Secretary of the State b. The Secretary of the Commission c. The Governor d. TRELA
(d) TRELA
According to Paragraph 7.A. in the contract, what are the seller's responsibilities regarding utilities? (a) The seller has no duty to keep utilities on if the house is vacant. (b) The seller must allow buyer to turn on utilities at buyer's expense during the contract term (c) The seller must turn utilities on to allow a buyer's inspection of the property (d) The seller must keep utilities on during the time the contract is in effect
(d) The seller must keep utilities on during the time the contract is in effect
Texas Real Estate Commission was created to enforce and administer the act in
1949
According to the TAR Residential Buyer/Tenant Representation Agreement, Paragraph 11 E, if the buyer purchases one of the broker's listings: (a) The buyer is liable for payment of a commission (b) The broker is considered a volunteer for the buyer (c) The cooperating broker is responsible for the commission to the agent (d) The seller pays the entire commission
(d) The seller pays the entire commission
What are some BENEFITS OF BUYER-AGENCY RELATIONSHIPS?
1) Access to market data 2) Investment analysis if renting 3) Assistance in "culling out" unsuitable properties. 4) Helping find financing 5) Help with negotiations 6) Help with preparing offers and negtiating 7) Help with surveys, inspections, repairs
What are the 2 rules regarding NET LISTINGS in Texas?
1) Brokers should only take this if the seller insists & the principal appears to be familiar with current market values. 2) A license holder is obligated to give their opinion of the market value when negotiating a listing.
What are the 2 types of listings the call for the broker to place the list into one or more MLS?
1) Exclusive Right to Sell 2) Exclusive Agency Listing
What are the AGENT'S DUTIES TO CUSTOMERS?
1) Honest Dealing 2) Reasonable Care and Skill in Performance 3) Disclosure of all Material Facts
What are the 2 forms of INTERMEDIARY?
1) Intermediary with Appointments 2) Intermediary without Appointments
What are the benefits of SELLER AGENCY?
1) Marketing 2)Negotiations are easier 3)Legal & Finance details are better facilitated 4) Time 5)Safety
What are the negatives to an ORAL AGENCY AGREEMENT?
1) Not enforceable against the client 2) It is enforceable against the agent 3) Is subject to confusion and misinterpretation 4) It can not be placed on the MLS since it is not in writing
How is an AGENCY TERMINATED?
1) The Property is sold 2) Expiration of the time period in listing contract 3) Mutual agreement 4) Death 5) Destruction of property 6) Bankruptcy 7) Operation of law 8) Brokers license revoked 9) Abandonment by agent 10) Revocation of agreement by the principal 11) Termination
The main purpose of the Department of Labor is "to ______________________________________________
1) promote and develop the welfare of working people 2) to improve their working conditions, 3) to advance their opportunities for profitable employment."
All transactions are said to have two "sides":
1. A listing side 2. A selling side
License holders have two levels of responsibility:
1. Public responsibility 2. Fiduciary responsibility
What are two other important laws impact the real estate brokerage business?
1. Texas Deceptive Trade Practices Act 2. Fraud in Real Estate and Stock Transactions
to have a subagency relationship two conditions must both be met:
1. The sale must be a cooperative sale, and 2. The buyer must be an unrepresented customer.
Under the Tax Equity and Fiscal Responsibility Act there are three tests for specifying that a sales agent is an independent contractor:
1. The sales agent must hold a real estate license. 2. The sales agent must be paid on a commission basis. 3. The sales agent must have a written contract with the broker specifying the sales agent is not an employee
What are 2 simple guidelines used to determine if a transaction is the be done under Intermediary rules?
1. The transaction must be an in-house sale. 2. Both sides (buyer/seller or landlord/tenant) must be clients.
There are three categories or types of agency:
1. Universal agency 2. General agency 3. Special agency
When a property is sold by a brokerage firm, two possibilities exist:
1. cooperative sale. 2. in-house sale.
What are some MATERIAL FACTS that should be questioned and disclosed:
1.) Land/soil conditions 2.) Pest infestations 3.) Toxic Mold 4.) Structural Issues - Roof, Doors, foundation, windows 5.) Conditions of electrical and plumbing 6.) Location: near power plant, landfill, Flood Plains, Wetlands, Endangered Species 7.) Potentially uninsurable property 8.) Known alterations and additions 9.) Public controls, Statutes and Public Utilities Ex: Zoning, School district, utility district, HOA membership
Shows the sum of payments received from a sales agent's broker during the tax year.
1099-MISC
What is the minimum number of employees for Anti-Discriminating Laws to kick in?
15 or more employees
_______________ is the relationship the agent has with his or her principal, or his or her broker
Agency
What is the easiest duty of the dual agent?
Accounting
A broker associated with and conducting all of his or her business as an agent of another broker.
Broker Associate
An individual holding a broker's license issued by TREC
Broker license holder
The License Act provides for two types of licenses to be issued, a _______________ and a _______________.
Brokers License Sales Agent License
EXCLUSIVE AGENCY AGREEMENTS are used generally with
Builders
What is the agreement signed by a buyer that allows a broker to represent them is called a ____________________________
Buyer/Tenant Representation Agreement
What is the acronym for the Duties of Principal to Agent?
CRIP
_______________________and any other means by which brokers are compensated by sellers and buyers are always negotiable between the parties.
Commission rates
What are the terms no longer allowed to be used in a Team Name?
Company Realty Associates Brokerage
Analysis based on properties that have recently sold that are most similar to the subject property.
Comparative Market Analysis (CMA)
The real estate agent should be informed on market conditions affecting the real estate business
Competency
When working with non-MLS brokers you should do what before showing the property to a potential buyer?
Contact the listing broker and enter into a fee sharing agreement.
A property is sold by a firm other than the listing firm
Cooperative sale
1. The Utilitarian Approach 2. The Rights Approach 3. The Fairness or Justice Approach 4. The Common Good Approach 5. The Virtue Approach
FIVE SOURCES OF ETHICAL STANDARDS
At the first contact with a party to a potential transaction, a license holder must disclose to that party whom he or she represents is called the __________________________
DISCLOSURE OF REPRESENTATION
A Texas law that was passed in 1973 that allows an aggrieved consumer to sue a seller of goods for damages.
Deceptive Trade Practices Act (DTPA)
The act of harming another person by making a false statement
Defamation
Marketing to a specific set of people sharing many commonalities
Demographic Farming
Informing the customer of material facts relating to a property
Disclosure
A real estate agent must not respond to or facilitate inquiries about or make disclosure which indicates any racial, or religious preference
Discriminatory practices
Receives a paycheck that is net of deductions for income taxes and other charges
Employee
What is Megan's Law?
Enacted in response to the murder of Megan Kanka. Requires the registration of of sex offenders.
What insurance can protect a broker from a seller misrepresenting property condition?
Error & Omissions Insurance
A contract between an insurance company and a broker/license holder
Errors and omissions policy
A set of principles or a system of values
Ethics
Who establishes the minimum wage, overtime pay, record keeping, and child labor standards?
Fair Labor Standards Act (FLSA)
The real estate agent should place no personal interest above that of his or her client
Fidelity
relationship, meaning that it is a relationship based on trust.
Fiduciary
Marketing to a specific area or location
Geographic Farming
What is an example of a psychological stigma property?
Haunted house, Events that have happened on the property such as murder, death, infectious disease
A property is sold by the listing firm
In-house sale
Receives a gross check and a 1099-MISC
Independent contractor
The real estate agent should employ prudence and caution so as to avoid misrepresentation in any way
Integrity
In Texas, what do we use instead of a Dual Agency?
Intermediary
___________________ is a process that makes it possible to bring client buyers and sellers together while at the same time representing their best interests.
Intermediary
Existing groups have until what date to change all SIGNAGE to comply with new TREC rules?
May 15, 2018
___________________ is defined as marked by extreme or excessive care in the consideration or treatment of details; careful.
Meticulously
Contract with a seller that gives the broker the right to find a purchaser for his or her property.
Listing agreement
The seller retains the services of a broker
Listing side
May be hired to assist a sales agent, but is not required to hold a real estate license
Personal assistant
___________________ occurs as a result of some condition near or on the property.
Physical stigma
A document that addresses broker and client safety, listing and contract files and license holder obligations.
Policy and procedure
What is an example of a physical stigma property?
Previous flooding, foundation problems, nearby landfills and nuclear power plants
Setting commission rates between groups of brokers in an area
Price fixing
The broker in the broker-sales agent relationship in real estate
Principal
The individual who, through a series of uninterrupted activities, brought about the completion of a contract
Procuring Cause of Sale
When do Agents pay their IRS tax bill?
Quarterly
______________________ is a requirement that an agent exhibit competence and expertise, keep clients informed and take proper care of property.
REASONABLE CARE
What are the 2 words that TREC says does not clearly advertise as a real estate broker?
Real Estate Properties
The agent is held to the standards of knowledge, expertise and ethics defined by TRELA
Reasonable care
The removal of Mold is referred as?
Remediation
TREC has adopted a ________________________________to be used in deciding if an advertisement is clear and conspicuous.
Safe Harbor Policy
_______________ is defined as acting in strict regard for what is considered right or proper; punctiliously exact; painstaking.
Scrupulously
The agent working with the buyer
Selling agent
The buyer retains the services of a broker
Selling side
What are the 2 federal laws that impact COMMISSION RATES & PRICE FIXING?
Sherman Anit-trust Act and Clayton Act
Federal legislation that specifically deals with illegal fixing of commission rates
Sherman Anti-Trust Act
Also known as limited agency
Special agency
Arise out of law
Statutory Defenses
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
Subagency
According to consumers, what is the most confusing type of advertisement?
Team Name
According to TREC, team names must end in?
Team or Group
A broker representing a TENANT in a real estate transaction
Tenant's Agent
Mold removal contractors must be licensed by?
Texas Department of State Health Services
Ethical standards and actions embrace common conditions that are important to the welfare (common good) of all. a) The Utilitarian Approach b) The Rights Approach c) The Fairness or Justice Approach d) The Common Good Approach e) The Virtue Approach
The Common Good Approach -
Ethical action is equal for all, or if not, then fair for some, based on some defensible standard. a) The Utilitarian Approach b) The Rights Approach c) The Fairness or Justice Approach d) The Common Good Approach e) The Virtue Approach
The Fairness or Justice Approach -
Individuals have the right to have their moral rights protected and respected, and the right to be told the truth, and not to be injured. a) The Utilitarian Approach b) The Rights Approach c) The Fairness or Justice Approach d) The Common Good Approach e) The Virtue Approach
The Rights Approach -
Ethical action produces the greatest balance of good over harm to those who are affected. a) The Utilitarian Approach b) The Rights Approach c) The Fairness or Justice Approach d) The Common Good Approach e) The Virtue Approach
The Utilitarian Approach -
Ethics are habits that enable us to act accordingly as persons who are truthful, honest, courageous, compassionate, generous, tolerant, and possess integrity, fairness, self-control and prudence.
The Virtue Approach -
What does PROCURING CAUSE mean?
This identified as the person who located the buyer for a listing.
May unlicensed persons serve as property managers for rental properties?
Those who hold themselves out as "property managers" for others and for compensation must be licensed, provided the person also rent or leases the property for the property owner
How are disputes between brokers and sales agents solved?
Through mediation, arbitration or the courts.
it is unlawful for employers to discriminate against or to fail or refuse to terminate any individual in their employ who discriminates against another due to race, color, religion, sex or national origin.
Title VII of the Civil Rights Act of 1964 (Title VI)
The power to act for the principal in all transactions
Universal agency
Is price fixing and/or standardize commission a violation of federal anti trust laws?
Yes, can not be done.
A buyer becomes a client by entering into a ___________________________ with the broker.
a buyer representation agreement
The shared information from the MLS can be used by agents to prepare a(n) ________. a. Comparative Market Analysis b. Listing Agreement c. Appraisal d. Seller's Disclosure of Property Condition
a. Comparative Market Analysis
The ___________ notifies the parties that both the seller and buyer are clients of the broker. a. Intermediary Relationship Notice b. IABS c. Dual Agency Notice d. Buyer's Representation Agreement
a. Intermediary Relationship Notice
Broker Steve, having no agents, is a solo practitioner in the state of Texas. He has a buyer-client who wants to purchase one of his listings. The process that Broker Steve must use is: a. Intermediary Without Appointments b. Transaction brokerage c. Intermediary With Appointments d. Dual agency
a. Intermediary Without Appointments
In real estate, an example of a general agent would be a(n) _____________. a. Property manager b. Escrow agent c. Cooperative Broker d. Intermediary
a. Property manager
Who can suspend or revoke a sales agent's license under a DTPA violation? a. TREC b. A court of law c. Congress d. The agent's sponsoring broker
a. TREC
The individual who, through a series of uninterrupted activities or actions, brought about the completion of a contract is also known as ______. a. The procuring cause of sale b. The closing agent c. The closing coordinator d. None of the above
a. The procuring cause of sale
Under Paragraph (b) of Chapter 23 Fraud, an individual who misrepresents a property under this section could be liable for ______________________________
actual damages.
The individual remains a customer until he or she enters into an
agency agreement.
Exclusive agency agreements: a. Set the broker's commission as the difference between the seller's minimum net and the price the buyer is willing to pay b. Allow the seller to sell the property himself without paying the broker a commission c. Grant the broker the a commission even if the seller sells the property himself d. Are outlawed in many states
b. Allow the seller to sell the property himself without paying the broker a commission
Why is timing critical when taking a listing? a. Listings must be entered into the MLS the same day b. Confidential information shared by the seller before an agency agreement is in place could result in harm to the seller's future negotiating position c. There are time limits attached to oral representation d. Timing is never an issue in taking a listing
b. Confidential information shared by the seller before an agency agreement is in place
What form must an agent provide to a potential client at the first substantive discussion of a real estate transaction? a. Buyer's Representation Agreement b. IABS c. Canons of Professional Ethics for Real Estate Agents d. The VAMA
b. IABS
Where would you find the Canons of Professional Ethics and Conduct for Real Estate License Holders? a. Texas State Constitution b. Rules of the Commission c. NAR Code of Ethics d. TAR Code of Ethics
b. Rules of the Commission
TREC rules define _____________ as any form of communication on behalf of a license holder designed to attract the public to use real estate brokerage services. a. Realty b. Marketing c. Advertisement d. Fraud
c. Advertisement
The ____________ is usually a fixed percentage of the sales price negotiated between the broker and the client, payable to the broker. a. HOA fees b. Earnest money c. Broker's fee d. Down payment
c. Broker's fee
The agreement that buyers sign, allowing a broker to represent them is called a ______. a. Buyer/Agent Agreement b. Seller's Disclosure c. Buyer/Tenant Representation Agreement d. None of these are correct
c. Buyer/Tenant Representation Agreement
Unlicensed assistants may not: a. Answer real estate office phones b. Schedule appointments c. Receive a commission on a real estate transaction d. Serve as a host at an open house to welcome visitors and distribute fliers provided a licensed agent is also present at the open house
c. Receive a commission on a real estate transaction
means that an agent must disclose if he or she is representing his or her parents or children.
consanguinity
The property is sold by a firm other than the listing firm, which is referred to as a
cooperative sale.
If a party to a transaction is not being represented by an agent, that party is known as a ________________
customer
If any person violates the provisions of the Texas Business and Commerce Code, Fraud in Real Estate and Stock Transactions, he or she is liable to the person defrauded for: a. Attorney's fees b. Expert witness fees c. Court costs d. All of these
d. All of these
What does the Consumer Protection Notice (CN1-2) notify of? a. How to file a complaint against a license holder b. The Recovery Trust Account c. TREC regulates brokers, sales agents, and inspectors among others d. All of these
d. All of these
Which of the following statements should a license holder only say AFTER a Buyer's Representation Agreement has been signed? a. "My professional opinion is that the market value of this property is $350,000." b. "I will write up the offer of $347,000 for you at my office." c. "It is my professional opinion that this house is overpriced for the neighborhood." d. All of these statements should be made after a Buyer's Representation Agreement has been signed.
d. All of these statements should be made after a Buyer's Representation Agreement has been signed.
Which statement is INCORRECT? a. The IABS can be sent as an attachment in an email or a link in the body of an email with specific reference to the IABS form in the body of the email. b. The IABS can be provided in the body of an email. c. An agent may overnight the IABS to a potential client. d. An agent must provide a blank copy of the IABS at the first substantive dialogue with a potential client.
d. An agent must provide a blank copy of the IABS at the first substantive dialogue with a potential client.
According to TREC's advertising rules, which of the following terms may NOT be used in a real estate team name? a. Company b. Realty c. Associates d. Group
d. Group
If one agent in the firm is working with both the buyer and the seller, _______ says that another agent in the firm needs to be brought into the transaction. a. No intermediary b. Intermediary without appointments c. Cooperative sale d. Intermediary with appointments only
d. Intermediary with appointments only
Which of the following is NOT anti-discrimination legislation that affects employers? a. Age Discrimination in Employment Act b. Rehabilitation Act of 1973 c. Genetic Non-Discrimination Act of 2008 d. Truth-in-Lending
d. Truth-in-Lending
____________________ is 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.
dual agency
The listing agreement or buyer representation agreement is an _______________________
employment contract
Independent contractors are paid a ___________________________________
gross check without deductions for taxes.
The property is sold by the listing firm, which is referred to as an
in-house sale.
• The Information About Brokerage Services (IABS) form, signed and dated • An explanation of duties to clients and customers • A legal description of the property, including a street address • The names of the parties to the contract with appropriate signatures • A beginning date and a termination date • The agreement to pay a stated commission, usually a percentage of the sales price • A description of the fixtures to be included in the sale, such as carpets, the television antenna, draperies, fireplace screens, etc. • Written permission to advertise and place a yard sign and other documents granting permission, e.g. permission to put a lockbox on the door • Fair Housing language and Fair Housing logo • Intermediary consent • Signed and dated listing agreement
listing package
__________________ where the seller retains the services of a broker.
listing side
If a broker has more than one place of business, a branch
office license is required for each location. It is not necessary to have a licensed broker at each location.
The agent must always remain loyal to the
principal.
The _____________________ of sale is the individual who, through a series of uninterrupted activities or actions, brought about the completion of a contract
procuring cause
The agent working with the buyer is referred to as the ____________
selling agent.
________________ where the buyer retains the services of a broker.
selling side
A property is ______________ when some event occurs, or some people believe that a past event or condition is affecting it.
stigmatized
when one firm sells a property listed by another firm to a buyer that they are not representing, the selling firm represents the seller in a ___________________
subagency
The "workday" is defined as
the period of time on any given day (employee's scheduled work days) that an employee begins and ends his or her principal activity.
a license holder who represents a party in a proposed real estate transaction shall disclose, orally or in writing, that representation at the time of the license holder's first contact with:
• Another party to the transaction; or • Another license holder who represents another party to the transaction.
Unlicensed Assistants May:
• Answer phone calls • Register prospects • Greet prospects and give general information about the area • Type correspondence • Schedule appointments • Be a closing or transaction coordinator • Telemarket, if not soliciting for listings or buyers
TREC still defines an advertisement as misleading if it:
• Implies that a sales agent is responsible for the operation of a brokerage • Fails to include the name of the broker
During the listing presentation and before signing a listing agreement, sellers should be advised of the following:
• Information About Brokerage Services (IABS) • The license holder's opinion of the market value of the property. • The firm's policy on advertising. • Fees that the seller will pay at closing. • A net sheet that approximates the net proceeds of the sale. • The firm's policy on subagency. • Intermediary consent, and the broker's policy relating to appointments. • During the listing period the seller should be kept updated on sales and pricing trends that may affect the final sales price of the property.
When the seller's agent is working with potential buyers, the agent must:
• Provide the IABS unless the buyer is represented by another agent. • Ensure that the buyer understands that the agent is representing the interests of the seller, and that the agent owes no more than a duty of honesty and fairness to the buyer. • If appropriate, discuss the possibility of the buyer entering into a buyer representation agreement with the broker.
In Texas, there are 4 statutory agency relationships allowed by TRELA:
• Seller Agency • Buyer Agency • Subagency • Intermediary
Unlicensed Assistants As a General Rule May Not:
• Show properties to buyers and answer real estate related questions about: 1. Listings 2. Closings 3. Financing 4. Title Issues 5. Market Conditions 6. Market Values • Host Open Houses and discuss the above information with a prospect • Negotiate, write or amend any transaction • Receive a commission or percentage of a commission based on a real estate transaction
What should be included in the BUYER REPRESENTATION file?
• The Information About Brokerage Services (IABS) form, signed and dated • General characteristics of the property search (market area) • Buyer's and broker's obligations • Term of the agreement • Broker's duties to clients and customers • Compensation agreement • Intermediary consent • Consent for broker to represent other buyers • Fair-Housing language • Signatures of the parties
What must happen in order for a BROKER to sue for a commission?
• The broker must have an employment agreement • hold a valid real estate license. • must be the procuring cause of the sale. • The broker must provide a qualified buyer who agrees to the sale terms • The license holder must have informed the purchaser, in writing, to have the abstract examined by an attorney
Trade and commerce include:
• advertising • selling • leasing • distributing
In a real estate office, the agents refer to the buyer's agent as the ___________________
"selling agent"
The License Act provides for two types of licenses to be issued
1. Broker License 2. Sales Agent License
What are 2 types of agreements that will form a SPECIAL AGENCY?
1. Listing Agreement 2. Buyer/Tenant Representation Agreement
There are two key points with respect to agency:
1. The principal will count on the agent for specific professional advice. The agent is the "expert". 2. The relationship almost always involves money or property.
The Texas Real Estate License Act (TRELA) was passed in
1939.
Section 1101.651 of the License Act lists _______________ specific violations that can result in the suspension or revocation of a real estate license.
30
If any funds are held for a client or a customer, these funds are said to be held in trust and must be placed in a separate account set up for this purpose.
ACCOUNTING
A relationship between two parties
Agency
________________________ exists when an individual grants express authority to the agent to perform some act.
Agency by actual authority
Established when an agent acts without prior authorization and the principal accepts it
Agency by ratification
_______________ occurs when an agent acts without prior authorization, and the principal, upon learning of this action, accepts it
Agency by ratification
(1) A broker who represents a seller, landlord, buyer or tenant. (2) Sales agent or broker license holders who represent the broker with whom they are associated.
Agent
acts for or on behalf of another person,
Agent
An agency relationship exists when one person, _______________, acts for or on behalf of another person, _______________, who is also known as _______________. This relationship is a _______________ relationship, meaning that it is a relationship based on trust.
Agent Principal Client Fiuciary
A broker representing the BUYER in a real estate transaction, also referred to as a BUYER'S Broker, Selling Broker, or Selling Agent.
Buyer's Agent
Any information learned about a client must be kept __________________ forever, and may not be disclosed without the written consent of the client.
CONFIDENTIALITY
Also known as the principal
Client
Buyers are increasingly discovering the benefits of being represented in a purchase, and often choose to become _______________ by entering into an _______________ with the broker.
Clients Agency Agreement
_____________________ is mixing client's funds with the business, operating, or personal funds of a broker, and is prohibited by the License Act.
Commingling
_____________ refers to the fact that the agent should be paid on completion of the agency.
Compensation
_______________ refers to the fact that the agent should be paid on completion of the agency.
Compensation
A broker selling the listing of another broker.
Cooperative Broker
A person who receives limited brokerage services without establishing an agency relationship
Customer
A person who receives limited brokerage services without establishing an agency relationship.
Customer
The distinction between a _______________ and a _______________ is crucial to the understanding of agency relationships. The broker has a _______________ duty to represent the best interest of a _______________.
Customer Client fiduciary client
An agent has a duty of full disclosure of all information relating to the property and the other parties in the transaction.
DISCLOSURE
Authority that comes from specific instructions, either oral or written
Express authority
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.
The Texas Real Estate Commission is not concerned with an agent's earnings and does not involve itself in _______________.
Fee Dispute
an individual has the right to represent his or her principal in a particular type of transaction or business example: property manager
GENERAL AGENCY
The relationship between a SALES AGENT and a BROKER can be describe as what kind of Agency?
General Agency
The right to represent the principal in a particular type of transaction or business
General agency
What is implied authority?
In residential real estate the seller should expect showing appointments at any given time of day. Morning, Afternoon, Evening and Weekends.
_______________ means that the principal will protect the agent from suffering a loss due to the agent's reliance on information received from the principal.
Indemification
Protection against damage or loss
Indemnification
________________ means that the principal will protect the agent from suffering a loss due to the agent's reliance on information received from the principal.
Indemnification
______________________means putting the interests of a client first.
LOYALTY
A broker representing a LANDLORD in a real estate transaction
Landlord's Agent
A person licensed by the Texas Real Estate Commission (TREC) to act as a broker or sales agent in a real estate transaction.
License holder
An agent is obligated to follow all of the lawful instructions of a client.
OBEDIENCE
When does earnest money have to be deposited in an Escrow Account?
Once a SALES CONTRACT is SIGNED, they have 2 business days.
_______________ means the principal is expected to perform as promised in the agency agreement.
Performance
____________________ means the principal is expected to perform as promised in the agency agreement.
Performance
___________________ refers to the fact that the agent should be reimbursed by the principal for expenses incurred on behalf of the principal, above and beyond the expenses related to the sale itself.
Reimbursement
the agent may perform only limited duties for the principal. They are not allowed to bind the principal because they are not allowed to
SPECIAL AGENCY
A sales agent or broker license holder associated with and conducting business as an agent of his or her sponsoring broker.
Sales Associate
An individual holding a license issued by TREC - an agent of the sponsoring broker.
Sales agent license holder
A broker representing the SELLER in a real estate transaction, also referred to as a SELLER'S Broker, Listing Broker, or Listing Agent.
Seller's Agent
A license holder not associated with the seller's broker, but who is representing the seller through a cooperative agreement, often through membership in a Multiple Listing Service (MLS), with the seller's broker.
Subagent
makes it illegal to practice any act of real estate brokerage without a license.
Texas Real Estate License Act (TRELA)
The _______________ makes it illegal to practice any act of real estate brokerage without a license.
Texas Real Estate License Act(TRELA)
has a broad range of authority to act for a principal. an individual has the power to act for the principal in all transactions. is rarely used in real estate brokerage Example: adult child to act for elderly parents
UNIVERSAL AGENCY
What are the duties to customers as PUBLIC RESPONSIBILITY?
a. Honesty b. Disclosure of material facts c. Handle all funds with care d. Be responsible for written or oral statements
What are the duties to customers as FIDUCIARY RESPONSIBILITY?
a. Put the interests of the client first b. Give full disclosure to the client (advice and opinions in addition to disclosing all pertinent facts - both material and other) c. Exhibit trust and honesty d. Exercise good business judgment e. Be loyal to the principal f. Be competent
Which of the following is grounds for suspension or revocation of license by TREC? a. Splitting a commission with a person other than a license holder b. Splitting a commission with a Texas real estate license holder c. Disclosing a material defect of a property. d. All of these are grounds for suspension or revocation of license
a. Splitting a commission with a person other than a license holder
_______________________, which is created when a principal inadequately supervises an agent.
agency by estoppel
When a broker is the owner of a property that is being sold, or when a broker is interested in buying a property, we have ______________________________
agency coupled with an interest
An agency relationship exists when one person, the _________ acts for, or on the behalf of another person, the _________. a. Client, agent b. Agent, principal c. Principal, agent d. Broker, customer
b. Agent, principal
A LISTING AGREEMENT establishes a special agency relationship between the _____________________________
broker and a seller or landlord.
A seller becomes a client by entering into a listing agreement with the __________
broker.
BUYER/TENANT REPRESENTATION AGREEMENT will also create a special agency relationship with the ____________
broker.
The commission can deny licensure to an applicant based on the applicant's ________. a. Credit score b. IQ c. Moral character d. Lack of college degree
c. Moral character
When a broker spends his or her client's funds without authorization, that broker is guilty of _________________
conversion.
agency relationships constitute the foundation of the practice of brokerage, it is essential that a license holder
have a deep understanding of agency concepts and law
How can a sales agent terminate with a broker?
it must be done in writing
How can a broker terminate a sales agent?
it must be done in writing, and the license must be returned to the Texas Real Estate Commission immediately
The Texas Real Estate Commissions main focus is to...
protect the public
The purpose of the License Act is to
protect the public against unscrupulous brokers and sales agents.
When in a cooperative sale, the buyer's agent is also known as
the cooperating agent because the buyer's agent cooperated in the sale with the listing agent.
sales agent is prohibited from splitting fees
with anyone, except through the sponsoring broker
The most desirable method of creating an agency relationship with a buyer, seller, landlord or tenant is to do so in _______________
writing.
What are the duties or responsibilities a Principal has to an agent?
• Compensation • Reimbursement • Indemnification • Performance
What are reasons to study agency?
• Compliance with state law and Commission rules. • A new license holder is an agent of his or her broker. • Growing public awareness of the duties of a license holder. • License requirements. • Professionalism. • A more "open" marketplace of information and ratings.
What does the acronym OLDCAR mean?
• Obedience • Loyalty • Disclosure • Confidentiality • Accounting • Reasonable care
The broker's agents are authorized to carry out any number of activities typical of this business, including but not limited to:
• Securing listings from sellers and landlords • Securing buyer representation agreements from buyers and tenants • Marketing listed properties • Showing properties to prospective buyers • Preparing offers • Negotiating offers
The GENERAL AGENT'S duties may include such activities as:
• Securing tenants • Collecting rents • Caring for the premises • Budgeting and controlling expenses • Hiring and supervising employees • Keeping proper accounts • Making periodic reports to the owner
