Moffitt Agency Exam 2

Broker Pappas of Pappas Realty enters into a written agreement to represent Seller Kelly and Buyer Jenny that also authorizes Broker Pappas to act as an intermediary. Broker Pappas elects not to make appointments when Buyer Jenny begins negotiations for the purchase of Seller Kelly's property. Under this scenario, which statement by the sales associate working with Buyer Jenny would NOT be authorized?

"In our market, buyers typically ask sellers to pay buyer closing costs."

Which of the following factual comments to the buyer by the appointed licensee would be permitted without the written permission of the seller in a fully authorized intermediary relationship with appointments?

"You could ask the seller to pay most of your closing costs."

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

ALL OF THE ABOVE "I know I can get the seller to pay at least some of your closing costs." "Trust me. I'm sure I can get the seller to reduce the list price." "The seller counter-offered $68,500 with another buyer last week."

Broker Katy has employment contracts with Seller Sue and Buyer Betty permitting Broker Katy to act as an intermediary and make appointments. Brenda, an associate for Broker Katy, has been working with both Sue and Betty. Buyer Betty decides to make an offer to Seller Sue. Which option(s) is (are) available to Broker Katy?

All of the above: Brenda could be appointed to either the buyer or the seller and a different associate assigned to Betty Buyer. Betty Buyer could be released from the agency agreement and seek representation from another broker. Broker Katy could elect not to make any appointments.

According to TRELA, which entity is eligible to hold a broker's license in Texas?

All of the above: Sonia Martinez, a Texas attorney Harry Smith, resident of Texas Happy Homes, a Texas corporation

It is important to determine in every case whether an agency relationship exists due to issues relating to

All of the above: imputed notice. legal effects. professional and ethical responsibility.

In Texas, express authority to act for a principal

All of the above: must be clear and unambiguous. must be written if a broker wishes to have the right to bring a lawsuit for commission. may be written or oral.

Jesse Longoria is the broker/owner of West Texas Realty. As the responsible broker, he may also be referred to as a

All of the above: principal broker. designated broker. sponsoring broker.

Bonnie, broker associate with Lowland Realty, signs a buyer representationagreement with Buyer Terri. Armando is the designated broker for LowlandRealty. Who is the agent of the buyer?

Armando

Broker Amil has a written listing agreement with George that also allows Broker Amil to act as an intermediary and make appointments. Jean, a sales associate sponsored by Broker Amil, has an oral agreement to represent her best friend Mary in the purchase of a new home. Jean shows George's property to her friend Mary. Which statement is TRUE?

Broker Amil has illegally entered into a dual representation role.

Broker Gary, owner of Orkney Realty, has verbally agreed to represent his friend Jerry in the purchase of a new home and will seek his 3.5 percent commission from the seller. Everything goes according to schedule until the day of closing.The seller arrives and refuses to close because his listing broker, Broker John of Dumbarton Realty, had failed to present another higher offer for the property that had arrived the week before Jerry's. Jerry is delighted because he had changed his mind about purchasing anyway and doesn't think he should have to pay Gary since he didn't buy the house. What recourse does Broker Gary have to secure his commission?

Broker Gary has no recourse

Lena is a broker associated with Yokohama Realty. She holds which license?

Brokers license

Which is essential to create an express agency relationship?

Consent and Control

Which event would be an example of termination of agency by operation of law?

Death of the owner.

Which is NOT a method of creating agency?

Expiration

A broker acting as a subagent of the seller may elect to be an intermediary between the seller-client and the buyer-client

FALSE

Although a termination date must be included in the listing contract, it is permitted to include a rollover provision if agreed in writing between the broker and the owner.

FALSE

Concerns regarding intermediary relationships are confined to residential transactions since TRELA does not permit brokers specializing in other areas of real estate to represent both parties in the transaction.

FALSE

A buyer's agent should not disclose to the buyer that the listing is underpriced for the area.

False

A specific termination date is required by TRELA for listing agreements but not for buyer representation agreements.

False

In Texas, an individual licensed as a real estate agent and a real estate inspector could list the property for the seller and inspect the property for the buyer.

False

In exclusive buyer agency, the broker may only take listings on properties owned by buyers the broker previously represented.

False

TRELA states that an intermediary "may be an agent of the parties to the transaction." TREC's general interpretation of the word "may" is that the broker may elect to assume a nonagency relationship with his or her clients.

False

Texas requires an express written agreement for a broker to establish either an intermediary or a buyer-agency relationship with a client.

False

Allisa, a licensed sales associate, transfers sponsorship of her license from Bay Area Realty to Crystal City Realty. What is TRUE regarding the buyer agency agreement Allisa signed with George while still with Bay Realty?

George remains a client of Bay Area Realty.

Broker Sue enters into a written agreement to represent Seller James and Buyer Mary that authorizes Broker Sue to act as an intermediary and make appointments. What must Broker Sue now do before any of her associates may show Seller James' property to Buyer Mary?

Nothing. The buyer representation agreement with Mary and the listing agreement with James were sufficient to establish written consent for Broker Sue to act as an intermediary.

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

Obtain written consent from Seller Kelly and Buyer Jenny to make appointments.

Harry, a sales associate with Monterey Realty, has taken a listing on Betty Seller's home. While showing the property to a prospective buyer, which statement by Harry might lead a jury to imply an agency relationship exists between Harry and the buyer?

Sellers in our market typically accept less than the listing price."

Su Casa Realty has an office policy of collecting a non-refundable retainer fee from each buyer-client. They also expect to be paid by the seller. Which statement is TRUE?

Su Casa Realty must disclose the retainer fee to the seller and obtain permission from all parties to collect both fees.

Agency can exist without regard to who pays the fee.

TRUE

Under TRELA, a broker may appoint more than one licensee associated with the broker to each client in an intermediary transaction.

TRUE

Dewey Cheatum has entered into a buyer agency relationship with Acme Realty. Dewey has just been released from prison after serving 18 years for real estate fraud, manslaughter, and embezzlement of his previous employer's funds. Dewey asks Acme to negotiate on his behalf for the cash purchase of a condo listed for $680,000 in Smuggler's Landing. Acme Realty will be paid by Dewey and also expects to be paid by the seller. Which information about Dewey must Acme Realty disclose to the seller?

That Acme Realty expects to be paid by Dewey as well as the seller.

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

The broker will act as an intermediary and make appointments.

Which event would NOT result in termination of an agency relationship?

The property is rezoned causing a drop in value such that the broker will not make adequate commission to cover his marketing expenses.

Although it does not matter whether the broker's fees are paid by the buyer or the seller, if the agency relationship is unclear, a court will likely consider who paid the fee to be an important factor in determining who is the agent's principal.

True

If a broker wishes to establish a written agreement to represent the buyer, the broker would be advised to use

a form prepared by a Texas attorney.

A third party is entitled to

accurate information.

Broker Irma is a one-person brokerage office. If in an authorized intermediary relationship she could

act as the intermediary but not make appointments.

In regard to the status of an intermediary, TREC generally interprets the relationship to be one of

agency

Jerry owns a large warehouse which he lists for sale with Cameron, a sales associate with Crystal City Realty. After several months, Cameron is unable to secure a buyer for the warehouse but does obtain a long-term lease offer that the owner accepts. The authority of the broker to obtain a tenant would be termed

agency by ratification.

Yolanda, a sales associate with Sapporo Realty, is having lunch with a friend. A man sitting at the next table is wearing a nametag indicating he is associated with another real estate firm in town. The man answers his portable phone and begins a conversation with someone he calls "Ben". The man suggests to Ben that considering Ben's poor credit rating, he might begin negotiations by asking the seller for a low down payment and a wrap-around mortgage. From the conversation, Yolanda might assume that the man is a(an)

agent of the buyer.

Susan is a broker associate with Highland Realty where she specializes inresidential property management. Jerry is the principal broker. Unless prohibitedby her contract with Jerry, Susan could

all of the above open a trust account in her own name for rental monies. place an ad without mentioning Jerry's name pay a referral fee directly to another broker.

The relationship between a broker and licensees associated with the broker is

an agency relationship and a fiduciary relationship.

Licensees should make modifications to the promulgated TREC contract forms only

at the direction of the client or customer.

The seller's acceptance of an offer from the buyer is effective

at the time of delivery to the buyer or the buyer's agent.

Effective January 1, 1996, TRELA

authorized statutory intermediary brokerage.

The best stage of the transaction to present the required written statement regarding agency options to the buyer would be

before beginning any substantive discussions with the buyer.

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

buyer's broker and the buyer.

The fiduciary duty which remains even after the termination of the agency relationship is

confidentiality

The practice of representing buyers or sellers exclusively is called

exclusive single agency.

Broker Ted manages Owner Bob's 20-unit apartment complex. In case he wants to raise the rents, Owner Bob instructs Broker Ted to limit all leases to less than 90 days. In regard to providing the statutory information about brokerage services to prospective tenants, Broker Ted is

exempt because the leases are under the statutory limit of 365 days.

A broker does not have to withhold social security and income taxes from wages of a sales associate treated as an employee as long as the associate signs an affidavit affirming that the associate will take personal responsibility for paying his or her own taxes.

false

A broker must set the same rate of compensation for all associates in the office or run the risk of a lawsuit for wage discrimination.

false

A licensed salesperson can legally list property in his or her own name.

false

Because TRELA states that salespersons cannot list properties in their own name,brokers are required to personally sign all brokerage contracts with clients.

false

Brokers may not incorporate the statutory information regarding brokerage services within a company brochure.

false

In Texas, brokers are required to carry worker's compensation coverage forindependent contractors as well as employees.

false

Presentation of the statutory written statement regarding the roles brokers might take in a transaction would be sufficient to also meet the specific requirement for disclosure of agency status.

false

Texas agency disclosure laws apply to residential licensees but not to commercial licensees or licensees involved with property management or farms and ranches.

false

The TREC approved form "Information About Brokerage Services" satisfies the statutory requirement for a written statement regarding agency options only if the prospect signs an acknowledgment of receipt.

false

The TREC-approved form "Information About Brokerage Services" meets the statutory requirement only for residential sales, not for tenant/landlord services.

false

The information regarding the roles brokers may play in a transaction may be written or oral, but the disclosure of agency status must be written.

false

To begin an intermediary transaction with appointments, the written notification need only include the names of the parties, not the appointees.

false

Wade wishes to transfer his license from Loch Long Realty to Isle of Skye Realtywhere he feels he can get more experience in property management andcommercial sales. Since he has 17 residential listings with Loch Long, allproperties belonging to his close friends and relatives, Wade's listings willautomatically transfer with him to Isle of Skye Realty.

false

The real estate broker who allows his sales associates to list their own homes through the brokerage without charging the usual listing fee has created

gratuitous agency.

Hans, a listing associate with Munchen Realty, is holding an open house at one of his new listings. The next door neighbor, Gretchen, arrives to tour the property along with friends who are relocating from another city. Hans introduces himself and explains that Munchen Realty represents the owner of the property. He does not provide the "Information about Brokerage Services", however he does provide a general fact sheet about the property, mentions the property is within FHA-insured loan limits for the area, and that mortgage interest rates are the lowest they have been in years. In regard to agency disclosure and the statutory written statement, Hans

has fully complied with TRELA.

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

his personal interest below those of his two clients.

Dumfrie is a licensed sales associate with Loch Ness Realty whose sponsoringbroker is Fitzroy McClean. Fitzroy and Loch Ness Realty would probably NOTbe held liable

if Dumfrie embezzles funds from a hospital where Dumfrie does volunteer work.

A broker representing the buyer may withhold the identity of the buyer from the seller

if the buyer requests to remain anonymous.

Maria Seller listed her townhouse with Bob Broker. Bob mails out flyers, places ads in the local paper, and posts notices on the community bulletin board. Bob has exercised what type of authority as the listing agent?

implied

Betty Broker has a listing on Sylvia Seller's home. Without Sylvia's permission, Betty tells a prospective buyer at an open house that Sylvia is desperate to sell within the next 30 days. Betty Broker is a/an

implied agent of the buyer.

A court would consider notification to the agent as notification to the agent's principal because of the rule of

imputed notice.

Debbie is the designated broker for Shetland Realty. She councils Jenny, a sales associate, that Jenny must stop wearing mini skirts to work, start attending all sales meetings, be at her desk Monday through Friday by 9:00 AM, and sign up for two Saturday duties every month. Debbie is jeopardizing Jenny's

independent contractor status.

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

is generally a nonissue.

In Texas, earnest money

is meant to provide a nonjudicial remedy for damages.

Broker Ted receives an e-mail from a prospective buyer who will soon be relocating into Ted's area from overseas. While surfing the web, the buyer became interested in several properties he found listed on Broker Ted's Web page. Broker Ted responds by e-mail and includes in his response considerable detail requested by the prospect about the seller financing limits of one particular owner. In regard to agency disclosure and the statutory information about brokerage services, Broker Ted

is not exempt from either disclosure and must therefore e-mail both disclosure of agency status and the written information about brokerage services.

Raymond has just received his broker's license and plans to open his own office, Homes Galore Realty. Agency options available for Raymond's new office would NOT include

mediator.

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

no further notification to the parties from Broker Terry, although it would be prudent to do so.

George, designated broker for Aberdeen Realty, sponsors Tina's license. Shesuccessfully finds a property through the MLS for her best friend Blake.Unfortunately, Tina discovers the day before closing that George has left town ona family emergency. Tina needs her share of the sales commission to make herhouse and car payment. Although she is unable to contact George and get hiswritten authorization for the closing office to cut her a separate check, TRELAwould permit Tina to

none of the above

John Byers is a buyer-client of Global Realty engaged in negotiation for the purchase of 123 Main Street, a property listed by another broker. He has offered $172,000 but is willing to go as high as $195,000. If Global Realty also represents a different buyer who recently and unsuccessfully negotiated with the seller, Global Realty should

obtain the consent of the other buyer-client to reveal the outcome of the previous negotiations to John Byers.

Sue, a "For Sale By Owner" non-licensee, wishes to market and sell her own property and informs all licensees that while they may show her property, they must seek compensation from the buyer. Sue does allow her friend Mary, sales associate with Newport Realty, to place the brokerage sign on the property and even gives Mary a key to the house for easy access. Mary subsequently secures a buyer for the property. After closing, the buyer sues Mary and Sue, claiming that Mary misrepresented the age and condition of the roof. If Sue claimed she should not be held responsible because Mary was not her agent, the court might find that the relationship between Mary and Sue was one of

ostensible agency.

Georgio listed his property for sale with Tony Principi, principal broker for Principi Realty. Georgio decides to seek a tenant for his property rather than sell so he asks Tony to remove the property from the market. If Tony agrees to release Georgio from his obligations under the contract, agency has been terminated by

rescission

The doctrine of law that says the broker is responsible for the acts and conduct ofall sponsored salespersons and broker associates during the ordinary course ofemployment is the doctrine of

respondeat superior.

Unless licensed as a salesperson or broker, a personal assistant could not

show listings.

Which written statement(s) must be in at least ten-point type?

statement regarding the roles brokers might take in a transaction.

The Real Estate License Act is an example of

statutory law.

The seller would NOT be liable for the acts and representations of

the buyer's broker.

If the seller fails to provide the required seller's disclosure of property condition prior to the time specified in the contract

the contract is voidable by the buyer.

The listing broker provided a written disclosure statement from his seller showing that the property was connected to the city water and sewer facilities. The listing broker lives on the same block as his seller and knows that most of the properties on that block have yet to be connected to the city facilities but does nothing to challenge his client's disclosure. The buyers are represented by a buyer's agent and discover the misrepresentation shortly after occupying the property. Liability probably rests with

the seller and the seller's broker.

Yard Arm Realty is representing Betty Buyer who is negotiating for the purchase of a property listed with Loch Long Realty. The seller agrees to Betty's request for seller-provided financing. In assisting Betty in the documentation of her offer regarding the provisions of the seller financing arrangement, the licensee from Yard Arm Realty could NOT use

the special provisions paragraph of the TREC-promulgated contract.

A buyer's agent from Edzell Realty who disclosed her agency relationship with the buyer during a phone conversation with the listing associate of Isle of Wight Realty has fully complied with TRELA's requirement for agency disclosure.

true

Dennie, a buyer's agent from Osaka Realty, shows her client-buyer a property listed by Kobe Realty. She realizes that when she left the message on the owner's answering machine earlier in the day, she had forgotten to disclose her agency status. Since TRELA requires notification of agency status on first communication with another party to the transaction, Dennie will be in compliance if she writes "Agent of the buyer" on her business card and leaves it on the kitchen counter of the listed property.

true

Express agency is a consensual relationship that requires both consent by the agent and a delegation of authority by the principal or client.

true

Once the broker has written permission to act as an intermediary on behalf of the buyer and seller, no further notification is required when an intermediary transaction begins unless the broker makes appointments.

true

TRELA holds the principal broker responsible for the acts of associated broker licensees.

true

Under TRELA, it would NOT be considered paying a fee to a non-licensee if Broker Clarece asked the closing office to use some of her brokerage fee to pay her buyer-client's closing costs.

true

Broker Bill has written authorization from both his clients, Seller Ringo and Buyer Ted, to act as an intermediary and make appointments should the situation arise. Broker Bill preappointed two sales associates, Alice and Gwen, to work as appointees to Ringo and Ted, respectively, should it become necessary. While Broker Bill is on an extended conference in Las Vegas, Buyer Ted decides to enter into negotiation with Seller Ringo. In regard to the appointees,

until both clients are given written notification and the names of the appointees, Alice and Gwen must perform the duties of an intermediary and remain impartial.

Chuck, a sales associate with Lakenheath Realty, drops by one of his vacant listings to turn off the hot tub. As he is leaving, Buyer Jacob arrives and introduces himself, mentions that he is represented by Broker Lowell at Donegal Realty, and asks to view the property. Before showing the listing to Buyer Jacob, TRELA would require Chuck to

verbally disclose to Buyer Jacob Chuck's agency relationship with the owner.

Broker Katy discovers a new MLS property that would be ideal for her Buyer- client Liz. Broker Katy follows the MLS showing instructions, leaves a message with the owner's answering service, and promptly arrives at the property for a 3:00 PM showing with Buyer Liz, only to discover that the owner has come home early from work. TRELA requires that Broker Katy

verbally disclose to the owner her agency relationship with Buyer Liz.

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

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