Buyer Agency

Which of the following is a true statement regarding the information about brokerage services notice?

Do you notice must be provided at the first substantive discussion about a specific property

Which of the following Agency Relationships is not available between a license holder and a buyer in a typical buyer/tenant representation agreement?

Dual agency. Real estate license holders cannot engage in dual agency in a real estate transaction in Texas.

Is a buyers agent held to the same standard of skill and care in dealing with the buyer as the sellers listing agent working with the buyer?

No, the buyers agent is held to a higher standard.

The TAR residential buyer/tenant representation agreement is a very good example of a buyer representation contract. Standard features of the TAR contract include

A broker protection period.

Which of the following is the best practice for license holders to establish a buyer/agency relationship?

A written agreement signed and dated by all the parties to the agreement.

In which of the following capacities can a license holder work with a buyer?

As a sub agent of the seller, as an agent of the buyer, as a sub agent of the buyer. License holders can act as agents of buyers, sub agents of sellers, or as an intermediary for both parties.

The role of the license holder in an exclusive buyer agency agreement is to

Assist the buyer in making a purchase. The agents emphasis is on helping the client evaluate different properties and alternative courses of action, and then getting the best deal possible once having elected to go forward with negotiations on a property.

Tom is the buyers agent for several employees of a large corporation that is expanding its local office. Tom is meeting with Marsha, who is the listing agent for several townhomes that might be suitable for these clients. When must Tom tell Marsha of his agency relationship with buyers?

At first contact. The real estate license act requires a license holder who represents a party to disclose the relationship orally or in writing at the first contact with another party of another license holder representing a party in the transaction.

License holders do not need to disclose to buyers that they are license holders at the license holders are selling a property on

Behalf of the license holder's best friend. In each of the other situations, plus in the case of a license holder selling a property on behalf of her parents or for a business entity of which the license holder is more than a 10% owner, the license holder must disclose in writing her status as a license holder to buyers.

In which of the following situations with having a buyer agency relationship be necessary to the buyer?

Buyer wants to remain anonymous. A buyers agent acting for an undisclosed principal may be able to negotiate a better price and better terms for the anonymous buyer.

Which of the following is the most widely accepted method of compensation for the buyers broker and residential sales?

Commission sharing with the listing broker.

Commission Split

Credits the buyer with a specified amount from the sales proceeds

Ruth, a buyers broker, asked the listing broker if she was willing to split the commission on a transaction. The listing broker would not agree to the split. What should Ruth do?

Explain the situation to the buyer. If the listing broker is not authorized to split the commission, the buyers broker should advise the buyer of that fact. The buyer then may decide to reduce the offering price to a net amount that reflects that the buyer is to pay his brokers fee.

How can you convince the buyer that exclusive agency representation with you is the best choice?

Explain to the buyer that when he works with multiple brokers, he will receive less, not more services, because all the brokers assume that another broker will be the one who makes the sale.

The buyers agent is expected to tell the seller the buyers future plans for the property

False

The buyers agent should not disclose to the buyer that the listing is overpriced for the area.

False

While confidentiality applies in agency relationships with sellers, it is not a fiduciary duty when representing the buyers

False

Under buyer agency, buyers do not have easy access to a larger market.

False.

A buyer as a customer and a buyer as a client will have the same level of loyalty to the broker.

False. A buyer who is a client will have a much greater level of loyalty to a broker than a buyer who is a customer.

Buyers can expect their agent to sell them on a listed property.

False. As opposed to persuasion to buy, buyers can expect to receive more counseling, expert opinion, advocacy, and advice regarding the acquisition decision.

Texas state licensing law does not require that a buyer representation agreement have a specific termination date.

False. TREC may suspend or revoke a license if the license holder fails to specify a definite termination date that is not subject to prior notice in any contract in which the license holder agrees to perform real estate services. The expiration date is fully negotiable and can be longer or shorter than in a listing agreement with a seller.

No conflict of interest will ever arise out of exclusive buyer agency because the broker is not representing to parties at the same time.

False. Theoretically, exclusive buyer agency offers protection from the risks associated with dual representation in the same transaction. Therefore, there is no conflict of interest as long as the broker is working for only one buyer-client who is being shown properties listed by other brokerage offices. Conflicts can arise, however, if two or more clients wish to begin negotiating on the same property.

Which of the following are buyer paid compensation?

Flat fees, percentage fees, hourly rates.

If a buyer is purchasing a property that will be financed by a department of Veterans Affairs (VA) loan,

Is a buyer's broker fee cannot be included in the loan amount. The VA does not allow lenders to include buyer's broker's fees in the loans to be paid by veteran purchasers. A VA transaction can include a buyer's broker, but the broker must be compensated by or through the seller.

When determining whether to require a retainer fee, a broker should

Is establish a consistent fee policy for all clients.

Which of the following is true regarding the statement any TREC contracts regarding the fee to be shared between the listing broker and the other broker?

It is merely information provided for the benefit of the buyer and seller.

Ace realty has a policy of charging a retainer or advance fee when representing buyers under a buyer representation agreement. What is ace required to do with the retainer fee?

It must be held in the brokers trust account.

Which of the following is an advantage of exclusive buyer agency?

It reduces the possibility of the unauthorized representation of more than one party.

Which of the following statements is false regarding reasons why a buyer may wish to be unrepresented as a customer in a transaction?

Listing agent just a facilitator for the transaction.

Which of the following is true regarding anonymity of a buyer principal?

Maintaining the anonymity of a famous buyer may keep the seller from increasing the asking price.

Gross price

More recent method of payment that is slowly gaining acceptance

Which of the following statements best describes a benefit of buyer agency to the broker?

No liability for acts of the listing agent. Broker agents must follow the same licensing procedures as other license holders, and they are held to the same ethical and legal standards. They have no agency relationship with either the seller or the listing broker, and they are not vicariously liable for their acts.

Must a listing broker provide a copy of a previous inspection report to a buyer?

No, but if the inspection report discloses a material defect on the property, the listing agent must disclose the defect.

Hourly rate

Payable regardless of any title transfer.

Which of the following is a benefit to the broker of having an exclusive buyer agency agreement with a buyer?

Protects the brokers investment of time with the buyer.

When a buyer forms an agency relationship with a broker, the buyer can expect that the broker will

Provide data relating to market values for properties that the buyer may be interested in purchasing. An important part of buyer representation is to provide the buyer with information so that the buyer may make wise, informed choices.

Non-contingent flat fee

Rarely used unless the agent has a great deal of experience in representing buyers

Which of the following best explains why a buyers broker may prefer to be paid directly by the buyer?

Remove control of payment from a non-client.

retainer fee

TREC trust account rules apply to how this type of compensation must be handled.

According to its licensing law, which of the following items is required in a buyer representation contract in Texas?

Termination date. A specific termination date on any buyer representation contract is required by Texas state licensing law. The expiration period is fully negotiable and could be longer or shorter than in a listing agreement with the seller.

Buyer representation agreement in Texas are promulgated by which of the following entities?

The Texas Association of realtors

How does the Texas Association of realtors sample buyer representation agreement address payment of Gordon's commission.

The broker will seek payment from the seller, but if the seller refuses, the buyer will pay the broker. In a typical buyer representation agreement, the buyer is not responsible for payment of the brokers commission unless the seller refuses to pay it.

The buyer/tenant representation agreement belongs to which of the following?

The broker. The broker, not the licensed associate of the broker, owns the buyer/tenant representation agreement. The buyer representation agreement belongs to the broker who has authorized the sales agent to enter into the agreement with the buyer on behalf of the broker.

An exclusive buyer agent may encounter a conflict of interest of two buyer clients want to make offers on the same property

True

The real estate license holder can, with proper disclosures, provide valuable services to a buyer without creating an agency relationship

True.

A buyers agent acting for an undisclosed principal may be able to negotiate a better price and better terms for the anonymous buyer.

True. Confidentiality can be especially important when the buyer wishes to remain anonymous. There are many buyers whose identity, if known to the seller, would cause the seller to hold firm or increase the asking price. A buyers agent acting for an undisclosed principal may be able to negotiate a better price and better terms of the anonymous buyer.

Buyer agency may be created by the actions of a license holder, as well as my written agreements.

True. Ideally, agency should be created with express consent of the parties. Implied agency occurs when there is no express agreement that the broker will act as an agent for a party, but the license holder, with no intended representation, make statements or performs actions that leave the buyer customer to believe the license holder has become the customers agent.

The fee to be paid to a buyers broker by a buyer client is determined by agreement between the buyers broker and the buyer.

True. The amount to be paid to the buyers broker is negotiable between the broker and the buyer client. Texas law does not require that buyer representation contracts be in writing; however, the broker who has no written agreement for compensation may take no action against a consumer who fails to pay the fee.

Buyers agents are held to a higher standard of performance than if they were acting as a sellers sub agent or the sellers listing agent

True. The buyers agent is held to the same standard of performance in working with the buyer client that the listing broker is held to in working with the seller client. The professional license holder, therefore, recognizes that adequately representing a buyer is a significant responsibility above and beyond the level of service provided by sub agents and listing agents to buyer customers.

A buyers agent should do a comparative market analysis (CMA) for any property on which the buyer is considering making an offer.

True. When the buyer is represented, the agent Owes the buyer advice and counsel as to the price that should be offered, and the only way for a buyer to know this is to know the approximate current market value of the property.

Exclusive buyer agency reduce agent liability for undisclosed dual agency or for intermediary brokerage.

True. Because the practice of exclusive buyer agency does not permit a brokerage to represent both buyer and seller in the same transaction, this liability would not be an issue.

Non-exclusive single agency brokers form relationships, but they don't do transactions.

True. It is the client relationship that is emphasized rather than a particular transaction performed for that client.

The license holder must disclose in writing to a buyer if you license holder is the owner of a property that the buyer is considering.

True. The license holder must disclose if he is the owner of the property. Disclosure also applies if the license holders spouse, parent, and/or a child is the owner of property being considered.

The broker, not the licensed associate of the broker, is the primary agent of the buyer.

True. Whether the broker is representing a buyer or a seller, the agency relationship is always with the broker. Because the sales agents are agents of the broker, the sales agents will represent whomever the broker represents.

When is a buyers commission earned under a typical buyer representation agreement?

When the buyer and seller execute a contract to purchase.

Is sub agency allowed in by representation?

Yes, an agent can be a sub agent of a buyers agent.

Must a buyers agent disclose his relationship with a buyer to an owner who is selling a property on her own?

Yes, at first contact.

Dee is a broker and has a buyer representation agreement with the buyer. Maybe be compensated by both the buyer and the seller?

Yes, but only with the full knowledge and consent of both parties. The real estate license act prohibits an agent from receiving compensation from more than one party to a real estate transaction without the full knowledge and consent of all parties to the transaction.

Is it permissible for a seller to pay buyers broker fee?

Yes, it should be stated in the contract. No legal or ethical barriers prohibit the seller from paying the buyer's broker fee.

Broker Bob has a buyer representation contract with buyer Jay sterling. Do the license holders who work in Bob's office have any relationship with Sterling?

Yes, they automatically represent Sterling. If the broker has a buyer representation agreement with the buyer, under Texas law, all license holders associated with the broker also represent the buyer and must act in that buyers best interest in any transaction.