Unit 8: Clarifying Agency Relationships Exam
A brokerage firm would like to direct its sales associates to provide the Information About Brokerage Services (IABS) Notice at a different time and in a different format than what the law provides. May the firm do so? A) License holders can provide the form earlier than the first substantive communication about a specific property, but the firm must use an exact replica of the TREC-promulgated form with the broker's contact information prefilled. B) License holders can provide the notice at any time, but it must use an exact replica of the TREC-promulgated notice adopted by reference in the TREC rules with the broker's contact information prefilled. C) License holders can provide the notice at any time, and the firm may use the TAR IABS Notice with the broker's contact information prefilled. D) License holders cannot provide the notice later than the time required, but it can use its own style of notice that is substantially similar to the TREC-promulgated form with the broker's contact information prefilled.
a
According to TRELA, which of the following license holders is NOT required to make a disclosure? A) The license holder who represented an unsuccessful bidder the last time the property was sold B) The license holder who represents the buyer C) The license holder who represents the seller of the property D) The license holder who is interested in buying a property for his own investment
a
Between which of the following sets of groups must brokers be able to distinguish in order to decide their agency responsibilities? A) Customers and clients B) Represented sellers and represented buyers C) New customers and long-term customers D) Inexperienced brokers and experienced brokers
a
Broker Fitzroy lists and sells Roni's house while representing Roni as a seller's agent; however, because of his brokerage policy, Fitzroy had to decline Roni's request to represent her in the purchase of another home. Fitzroy's office policy is that of A) exclusive seller agency. B) intermediary. C) nonexclusive single agency. D) exclusive buyer agency.
a
Broker Ted manages owner Bob's 20-unit apartment complex. In case he wants to raise the rents, Bob instructs Ted to limit all leases to less than 90 days. In regard to providing the Information About Brokerage Services Notice to prospective tenants, Broker Ted is A) exempt because the leases are under the statutory limit of 365 days. B) not exempt and must present the written statement to all prospective tenants. C) exempt because the statutory information statement does not apply to rentals. D) exempt because the written statement only applies to rental properties having more than 365 units.
a
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 Jacob, TRELA would require Chuck to A) verbally disclose Chuck's agency relationship with the owner to Jacob. B) present Jacob with the Information About Brokerage Services Notice. C) do all of these actions. D) confirm the existence of a written buyer's agreement with Donegal Realty and obtain Lowell's permission to show the listing to Lowell's client
a
For an intermediary transaction, broker Pete is making appointments for sales agents to represent the buyer and the seller. Which of the following regarding the appointees should Pete disclose to those parties? A) Names B) Educational qualifications C) Years of experience D) Experience as intermediary
a
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 Notice; however, he does provide a general fact sheet about the property and mentions that 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 A) has fully complied with TRELA. B) should not have disclosed his agency status because this was an open house. C) should have provided the statutory written statement because he did not limit his activities to handing out the fact sheet. D) should also have presented the statutory written statement.
a
Herb is a broker who is representing Albert Dorgan in the sale of his store. While Herb was photographing the store, a consumer visited the property. The customer asked Herb if he knew about the status and zoning of the property and if the current tenant has a lease. Is it necessary for Herb to disclose his agency relationship to this customer? A) Yes, based on the questions the customer is asking. B) No, the customer has not expressed an intent to purchase. C) No, the customer has not asked about the broker's relationship. D) Yes, because the customer is unrepresented.
a
Jackie Keller, a broker, is holding an open house on a luxury condominium. Which of the following questions from a customer would trigger the need to provide the Information About Brokerage Services notice? A) Do your other condominium listings in this area have lower fees? B) When did this unit go on the market? C) How long has this building been a condominium? D) What are the fees associated with this unit?
a
When a broker is serving a customer as a subagent of the seller, the broker should NOT A) provide the customer with advice. B) represent the interests of the seller. C) treat the customer with fairness. D) disclose the relationship.
a
Which Information About Brokerage Services (IABS) Notice is a license holder required to provide to a potential party to a real estate transaction? A) The IABS Notice promulgated by TREC B) The IABS Notice created by TAR C) An IABS Notice created by the license holder D) The IABS notice created by the Texas Legislature
a
Which of the following conditions is MOST important when developing a company policy on disclosure? A) Compliance with Texas law B) Availability in Spanish C) Acceptance of all license holders D) Publication and distribution
a
Which of the following is NOT a requirement of a broker's comprehensive plan? A) Establish an office religion B) Comply with Texas law C) Focus on serving clients and customers D) High ethical standards
a
Why should a broker's policy manual address sales agent advertising? A) Because TREC rules require it B) Because the FTC rules require it C) Because the Attorney General of Texas requires it D) Because the rules require that TREC preapprove all advertising
a
Is a broker responsible for knowing whether a sponsored sales agent is competent to engage in commercial brokerage? A) No, the commission is responsible for knowing whether a licensed sales agent is competent to engage in commercial brokerage. B) Yes, a broker is responsible for the authorized acts of the sponsored sales agent when engaging in brokerage activity. C) Yes, a broker is responsible for all acts of a sponsored sales agent. D) No, a sales agent is solely responsible for her own competency.
b
Les Stoker, a broker who practices exclusive seller agency, has a former client who is determined to buy one of Stoker's listings. Stoker explained the situation to the former client, who agreed to go ahead with the transaction as an unrepresented customer. What should Les do if his former client starts talking about personal family issues that impact the former client's negotiating position? A) Les is serving the seller's interests in using his prior relationship with the buyer to obtain important information, so he should say nothing. B) It appears that the buyer-customer does not understand the full implication of the changed relationship; Les should ask the former client to stop talking about his financial problems. C) Les can share any information he receives after termination of agency, so he should listen. D) Les should do nothing because the broker's obligation for confidentiality continues after the termination of agency.
b
Les Stoker, a broker who practices exclusive seller agency, is acting as seller-agent for Hedy Black, a long-term client. Les has another former client who showed interest in Black's property. Stoker explained the situation to the buyer-customer, and the buyer-customer decided to go ahead with the transaction as an unrepresented buyer. When Stoker told Black about the situation, including his inability to disclose information about the buyer that was gained through the agency relationship, Black refused to accept the situation. She told Les, "You're my broker and you owe your full allegiance to me. You should tell me everything I can use to benefit from this transaction." What should Les Stoker do if this seller-client continues to object to his position? A) Disclose the information that the seller requests after notifying the buyer. B) Refer the seller to another broker for representation. C) Determine which relationship will be more valuable to him in the future. D) Request that the seller sign a release for the information the seller wants.
b
Sally is a sales agent who markets her listings primarily on her Facebook page. How does Sally comply with the IABS Notice publication requirements? A) Sally must provide an exact replica of the notice on her Facebook profile or page. B) Sally can link to the notice from her profile or link to her main business website that has a link to the notice. C) Sally must provide a link to the TREC website page where the notice can be downloaded. D) Sally is not required to comply with the requirements if she uses Facebook to market her listing
b
TREC's Information About Brokerage Services Notice must be provided A) whenever an initial meeting takes place with a prospective buyer or seller. B) at the first substantive communication about a specific property. C) in either an oral or written format. D) as a substitute for the agency disclosure.
b
Which of the following is a TRUE statement regarding provision of the IABS Notice at an open house? A) A license holder is required to provide the IABS Notice at an open house if a person is represented by another license holder. B) A license holder is required to provide the IABS Notice at an open house if there is substantive dialogue about other property. C) A license holder is never required to provide the IABS Notice at an open house. D) A license holder is always required to provide the IABS Notice at an open house.
b
Which of the following steps should be completed first when creating a company disclosure policy? A) Write a company policy on agency policy. B) Review the various agency options. C) Consider staff capabilities and the market. D) Review the advantages and disadvantages of various agency options.
b
Which of the following terms BEST describes the formation of an agency relationship? A) Permanent transfer of authority B) Consensual relationship C) Mandatory relationship D) Arbitration and mediation
b
Which written statement(s) must be in at LEAST 10-point type? A) Seller's Disclosure Notice B) Information About Brokerage Services Notice C) All TREC forms must be in 10-point type D) Agency disclosure
b
According to TREC, a broker must develop a company policies and procedures manual on agency so that each sponsored sales agent understands the scope of authorized activities and can A) benefit financially from those activities. B) delegate responsibilities to nonlicensed assistants. C) competently conduct those activities. D) differentiate employees from independent contractors.
c
Are license holders required to provide the Information About Brokerage Services (IABS) Notice at an open house? A) Yes, but a license holder may provide the notice orally or in writing. B) Yes, if there is a substantive discussion about that property. C) Yes, if there is a substantive discussion about another property. D) Yes, but only if the party is represented.d
c
Are sales agents required to be notified of the scope of their authorized activities? A) No, sales agents are presumed to be competent in all kinds of brokerage. B) Yes, the TREC rules require that TREC notify sales agents of the scope of their authorized activities. C) Yes, TREC rules require the broker to notify sales agents of the scope of their authorized activities subject to the act. D) No, sales agents are free to practice whatever kind of brokerage they feel like engaging in.
c
Broker Katy discovers a new MLS property that would be ideal for her buyer-client Liz. 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 Katy A) do none of these things. B) present the owner with the Information About Brokerage Services Notice. C) verbally disclose to the owner her agency relationship with Liz. D) leave and arrange for a showing on a day the seller is not home.
c
Broker Scott heard that a buyer is interested in placing an offer on one of his listings. The prospective buyer saw the property while being escorted by a license holder from another firm. Which of the following questions must Scott ask about the other license holder in order to understand agency relationship in a possible transaction? A) Is that license holder an employee or an independent contractor? B) Is that license holder a sponsoring broker or an associate broker? C) Is that license holder a subagent of the seller or an agent of the buyer? D) Is that license holder pursuing an in-house transaction?
c
Can a license holder provide the IABS Notice via email? A) Yes, but the form must be attached to the email. B) No, the notice can only be provided in person or by first-class mail. C) Yes, but there are strict rules the license holder must follow if it provides the form via email. D) No, the notice can only provide the form by personal service or by publication on its website or social media page.
c
Can a newly licensed sales agent engage in property management? A) Yes, a new sales agent is not limited in the kinds of brokerage she can engage in. B) No, a new sales agent must wait three years before engaging in property management. C) Yes, a new sales agent may engage in property management if her sponsoring broker authorizes her to do so. D) No, a new sales agent must first be certified by TREC before engaging in property management.
c
Describe the steps for creating a company policy for disclosure. Which of the following is one of the steps in creating a comprehensive brokerage firm policy? A) Submit the policy to TREC for review. B) Submit the policy to TAR for review. C) Submit the policy to legal advisers for review. D) Submit the policy to the secretary of state for review.
c
During an open house, what behavior would trigger the need to provide a customer with the Information About Brokerage Services notice? A) Customer visits the property a second time during a single day B) Customer visits with a buyer's broker C) Customer asks in-depth questions about another property D) Customer makes inquiry about the broker's qualifications
c
Mary, a broker, is considering the practice of exclusive seller agency. She works in a wealthy market and has many long-term relationships with families that are frequently involved in both residential and investment real estate transactions. Which of the following statements accurately describes a disadvantage of exclusive seller agency that Mary should consider? A) Fewer risks by concentrating on the seller side of the business B) Disappointing valued clients when having to terminate the agency relationship for a single transaction C) Losing potential commission by limiting her practice to seller-only D) Increased potential for charges of undisclosed dual representation or intermediary brokerage
c
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 include A) nonexclusive single agency. B) intermediary. C) all of these. D) buyer agency.
c
The creation of agency requires a delegation of authority by the principal and A) written disclosure. B) approval by the other party. C) consent by the agent. D) naming of appointments.
c
What decision must a license holder make to form an appropriate working relationship with each individual in a transaction? A) Seller's role in marketing B) How to market the property C) Whom to represent D) Market value of property
c
Which of the following is NOT a duty owed to a customer? A) Disclosure of material facts B) Fairness C) Confidentiality D) Honesty
c
Which of the following items is NOT generally included in a company's agency policies and procedures manual? A) Basic agency philosophy B) Working with outside companies C) Office hours for sales staff D) Comply with all state laws
c
Which of the following steps in developing a company policy on disclosure should come last? A) Review the various agency options. B) Write the company policy. C) Train the staff and monitor performance. D) Select the agency representations that will be practiced.c
c
Why should a policy manual include a section on open houses? A) Because the Texas Real Estate Commission requires it B) Because the TREC rules require it C) Because it is a complex agency situation D) Because the Real Estate License Act requires it
c
With exclusive seller agency brokers will A) only represent buyers/tenants. B) represent buyers/tenants or sellers/landlords, but not in the same transaction. C) only represent sellers/landlords. D) represent buyers/tenants and sellers/landlords, but only if each agrees to allow intermediary brokerage.
c
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 Ted's website. 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 Information About Brokerage Services Notice, Ted A) is exempt from disclosure of agency status, but he must e-mail the Information About Brokerage Services Notice. B) is exempt from both disclosures. C) is exempt from providing the Information About Brokerage Services Notice, but he must disclose his agency status. D) is not exempt from either disclosure, and he must therefore e-mail both disclosure of agency status and the Information About Brokerage Services Notice.
d
There are both differences and similarities when client and customer services are compared. A service that is a client service but not a customer service is A) honesty. B) fairness. C) disclosure of material facts. D) opinions and advice.
d
Under TRELA, there are certain exceptions to providing the Information About Brokerage Services Notice. These exceptions include all of the following EXCEPT A) when there is no substantive discussion regarding a specific property. B) when the proposed transaction is for a residential lease for less than one year and no sale is being considered. C) when the meeting occurs with a party the license holder knows is represented by another license holder. D) when the buyer or the seller is a child, a spouse, or a parent of the license holder.
d
Which of the following is NOT part of a decide, disclose, document, and do policy in real estate brokerage? A) Divulge your representation to the other party. B) Act consistently in the way you treat the parties according to how you represent them. C) Choose who you will represent and in what capacity. D) Keep written confirmation that you provided your firm's policies to TREC for approval.
d
Which of the following topics is NOT required to be included in a brokerage firm's policy and procedure manual according to TREC Rule Section 535.2(i)? A) Ensuring that sales agents comply with TREC advertising rules B) Confirming that sales agents maintain their license on active status C) How sales agents are advised of the sales agent's scope of authority D) Conducting an open house
d
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 cell 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 wraparound mortgage. From the conversation, Yolanda might assume that the man is a(an) A) seller's agent. B) subagent of the seller. C) intermediary. D) agent of the buyer.
d
