Law of Agency
A real estate licensee is obligated to provide which of the following on a property when negotiating a listing?
Both of these are correct - A comparative market analysis - A broker price opinion
According to Section 1101.558 of TRELA, which of the following parties must be provided with a disclosure when the first instance of contact occurs?
Both of these correct - Another party to the transaction - Another licensee who represents another party to the transaction
Which of the following is one of the primary forms of real estate agency in Texas?
Buyer's agency
Which of these is not listed as topic for a brokerage policy to address?
Disciplinary measures
Which of the following is not a duty that a broker owes to a sponsored licensee?
Disclosure
In Texas, which of the following statements regarding buyer representation IS accurate?
Does not need to be in writing
When setting up a buyer representation agreement, the licensee must make sure that he or she does not do which of the following?
Promise to do things that are outside their area of expertise
The purpose of the information about brokerage services form is to:
inform the public about how real estate agency works in the state of Texas, so that buyers, sellers, landlords, and tenants can make informed decision about representation
In Texas the sellers disclosure of property condition
is an optional form
Personal assistants in real estate professions ______ hold a real estate license
may or may not
Real estate commission are:
negotiable, through every area has a common standard range
when once or both parties to a transaction are represented by the same agent, it may create which of the following situations?
Undisclosed dual agency
with a few exceptions, Texas law prohibits sharing commission with:
parties who do not possess a valid real estate license
Broker have which of the following with a client?
privity of contract
What is the traditional form of real estate agency?
seller's agency
All real estate contracts (with the exception of property management contracts) are required to contain a...
termination date
The fiduciary duty of " no profit" means that
the agent is bared from making decisions which will specifically benefit the agent, especially at the expense of the principal
The principal may not owe compensation to the agent if:
the agent was negligent and caused damages to the principal
The major differences that determine whether an agent is an employee or an independent contractor are:
the amount of supervision they receive and the way they are compensated
frank is a real estate broker representing a buyer. when must frank disclose this fact to the party selling the property the buyer is interested in?
the first time Frank makes contact with the selling party
if a broker is also the principal in a sales transaction:
the other parties to the transaction should be made aware of this
Before any appointments of licensees can be made, the broker who is acting as the intermediary must receive...
the written permission of the both the buyer and seller to appoint licensees. .
if a licensee fail to give a disclosure at the correct time:
they can be penalized
The designated agency arrangement must involve:
two agents with the broker supervising the designated agencies as an intermediary
Does a former agent owe any duties to a former principal?
yes
An non-exclusive buyer-broker agreement:
can be either for compensation or not for compensation
The most common way that real estate agency relationships end is through:
completion
which of these duties of an agent lasts past the conclusion of the agency relationship?
confidentiality
Customer service duties are owed to clients and customers by the agent. The consequence of not performing these well is:
customers and client refusing to work with the agent
A broker can reduce and manage their risk through which of these options?
developing a robust and through brokerage policy with regard to agency relationship
What is the term for someone who possesses a valid broker's license but who is sponsored by another broker?
A broker associate
A buyer-broker agreement will normally charge the broker with the following duties
All of these are basic buyer's agent duties - conduct a visual inspection of properties the buyer is interested in buying - find properties that the buyer may be willing to purchase - review paperwork
A licensee inadvertently representing more than one party is normally also...
an undisclosed agent
Rachel and miles are both sales agent working for Universal Reality. One day, a buyer comes to the brokerage office looking for assistance with purchasing a small office building. Miles and the buyer end up sitting down and drafting an exclusive buyer representation agreement. A week into the process, Miles is in a car accident and ends up being hospitalized with serious injuries. Since Miles is unable to work with the buyer, Rachel take over. Rachel helps the buyer through the process of meeting with the seller and with drafting the initial offer. Th seller then sends back a counteroffer. it is about this time that Miles is released from the hospital. He resumes representing the buyer and works with the buyer through the closing. After the closing, Rachel request a percentage of the commission since she represented the buyer for Miles while he was in the hospital. Miles refuses stating that he was officially the buyer's agent and is owed the full commission. Rachel goes to the supervising broker claiming that she in fact deserves the commission from the buyer.
1. What is the term for what Rachel is using as the basis for her claim to a commission? Procuring cause 2. What would be the reasoning for giving Rachel the commission? Rachel did more than Miles to cause the transaction of the office building to go through successfully 3. Assuming Rachel and Miles work for the same broker, why was Rachel allowed to take over for Miles? All licensees working for a broker-agent are also considered to be agent of the broker's client 4. Which of the following is the best way that this dispute between Rachel and Miles could have been prevented? A brokerage policy requiring that, in situations where multiples sales agents are working with the same client, the commission be split in proportion to the amount of work the each sale agent did for the client
When was statutory dual agency in Texas fully replaced by intermediary brokerage?
1996
Exclusive seller agency refers to which of the following?
A broker who/brokerage that only represents sellers
Real estate agent are considered to have which kind of relationship with clients?
A fiduciary relationship
Which of the following best describe a " stigmatized property?"
A property that is considered undesirable or less desirable by some buyers because of a " psychological" event, such as a murder, on or associated with the property
What duties does a real estate agent have, with regard to the material facts?
A real estate agent should inform all parties of the material facts
Which of the following parties acts as an agent of a sponsoring broker?
A sponsored licensee
Acting as which of the following is a violation of the real estate license act?
Acting as a broker without possessing a valid license issued by the Texas Real Estate Commission
Which of the following is a term that describes the relationship between brokers who are from different brokerages?
Adversarial
The Real Estate License Act forbids which of the following with regard to advertising?
Advertising that is purposefully deceptive
Rule 535.2 of the TREC Rules states that, at minimum, a broker who sponsors sales agents will maintain written policies and procedures to ensure which of the following?
All of these are correct - Each sponsored sales agent complies with TREC's advertising rules - Each sponsored sales agent is provided on a timely basis, before the effective date of the change, notice of any change to TRELA, the TREC Rules, or TREC promulgated contract forms - Each sponsored sales agent maintains their license in active status at all times while they are engaging in activities subject to the TRELA
A licensee who is representing a buyer is required to treat which of the following in an honest and fair manner?
All of these are correct - The buyer - the seller - the seller's agent
Which of the following is a reason to study the aspects of agency and agency law?
All of these are correct - agent who follow the law have a better reputation with the public - agents who are well versed in the aspects of the agency roles can project an aura of confidence that can calm a nervous client - agents who follow the law are less prone to being held liable for harm suffered by clients or customers
A seller who has established a listing contract with a broker benefits from the broker's...
All of these are correct - experience. - access to resources possessed by the brokerage. - knowledge.
Which of the following is a type of listing agreement?
All of these are correct -Exclusive Right-to-Sell -Net -Open
According to Section 5.008 of the Texas Property Code, a seller's agent does not have a duty to make a disclosure related to whether a death that occurred on the property was caused by __________, if it is unrelated to the condition of the property.
All of these are correct -suicide -natural causes -accident
A person contacts a licensee and expresses an interest to buy real estate. The licensee provides a written document that details the duties of the licensee while acting as an agent and the compensation the licensee expects to receive in return. The person signs the document. What kind of agency relationship was formed?
An expressed agency relationship
What is the term for a broker who is employed to negotiate a transaction between the parties to a transaction?
An intermediary
An agency relationship may be terminated by:
Any of these - incapacity of the agent or principal - destruction of the property - an operation of law
An employing broker may also be called:
Any of these: - a sponsoring broker - a designated broker - a principal broker
A misrepresentation is best described by which of the following?
Any untrue statement whether or not the person making it is aware it is untrue
When filling in a form approved by the Texas Real Estate commission, the license holder may make changes to the printed contract language:
As is necessary to conform the instrument to the intent of the parties
When is a licensee required to provide a seller with a written statement which contains the disclosure describing services which may be expected from an agent of a seller?
At the time of first substantive dialogue
The information about brokerage services (IABS) form is disclosure that is required to be given to a potential client:
At the time of the first substantive dialogue
What is the primary topic of the third section of this class?
Classifications of agents
The different between expressed authority and implied authority is:
Expressed authority is authority that is clearly and specifically granted to an agent, while implied authority is authority not specifically granted to an agent but assumed to be necessary to carry out duties
A licensee may have his or her license revoked if he or she does which of the following?
Fails to make clear to all parties to a real estate transaction the party for whom the license holder is acting
What is the term for the type of agreement that is formed when the parties didn't establish an expressed agreement but act in all ways as if an expressed agreement exists?
Implied-in-fact
What is the term for a transaction in which licensees from the same brokerage represent both the buyer and seller?
In-house sale
What is private information?
Information about a person which is not public knowledge but which will most likely not result in identity theft if it is revealed
Which of the following is the only legal way in the State of Texas to represent more than one party in a real estate transaction?
Intermediary brokerage
In Texas real estate, an intermediary: is best described by which of the following?
Is a broker who is employed to negotiate a transaction between parties to a transaction in an impartial manner
Net listing are allowed to be used in Texas, but the listing agreement must:
Limit the broker to a specified maximum commission
What is the term for a termination of an agency relationship that is agreed to by both parties to the relationship?
Mutual rescission
The fiduciary duties of an agent do not apply to which of the following?
Negotiations over the agency contracts
Which of the following is something that an intermediary is allowed to disclose?
Neither of these are correct - The lowest price the seller will accept - The maximum price the buyer will pay
In Texas, must a subagent be affiliated with the broker he or she is acting as a subagent for?
No
What is the term for a duty owed by an agent to someone who is not the principal party?
Non-fiduciary duty
A personal assistant without a valid broker's license is allowed to do which of the following?
None of these are correct - Control deposit of rent from a resident of a single-family residential real property unit - Negotiate the lease of real estate - Auction real estate
A contract is terminated because the agent neglected to file all of the necessary paperwork to make the contract legal. This contract was terminated by which of the following?
Operation of Law
Which of the following is not a common way in which the buyer's commission can be paid?
Paid by the financial institution financing the transaction
The term " fiduciary" originates from a Latin term which means:
Trust
Which of these does the IABS NOT list as a standard broker duty?
Provide a legal appraisal of the property to the lender
Which one of the following is not one of the commonly recognized fiduciary duties?
Punctuality
Which of these is NOT a common way of dividing Ethics/Morals?
Reasonable/Unreasonable
An agent who decides not to continue representing a client may elect to do which of the following?
Renounce the relationship
The duty of a seller's agent to be loyal to the _______ trumps the duty to be forthright with the_______.
Seller / Buyer
Which of these is not a common element of a listing agreement?
Seller's reason for selling
Title IX prohibits discrimination by educational programs and activities that receive federal funds on the basis of which of the following?
Sex
Real estate agents are commonly which of the following with regard to their clients?
Special agents
The end section of this class addresses which of the following?
Stigmatized properties
What is the name of the form created by TREC to help sellers meet the requirements of Section 5.008 of the Property Code?
The Seller's Disclosure of Property Condition
Who does a buyer representation agreement drafted by a sales agent belong to?
The broker who sponsors that sales agent
When a broker employs another broker which of the following is true?
The employing broker is held responsible for the behavior of the employed broker
Who has the right to choose whether to disclose non-material stigmas related to a property being sold?
The seller
What does the administrative code in Texas say regarding oral and written listing agreements?
They are both legal, but a person may not pursue legal action to collect a commission unless there is a written and signed agreement
IF an agent has vested interest in a property transaction, which of the following actions must be taken?
They may act an agent in the transaction, but are required to inform all parties of their potential conflict of interest
If a broker or sale agent discloses that their client will accepts less than asking price:
They must have instruction from the client to do so in writing
What is the term for a person or organization that a person interacts with while acting as an agent for a principal party?
Third party
do the policies of a brokerage need to be regularly updated?
Yes
A real estate syndication is best described by which of these?
a group of investors who pool resources to to invest in an opportunity
A principal becomes disabled and gives authority to an agent to act on behalf of the principal in nearly all circumstances. This type of agent is...
a universal agent.
When a person or organization acted for another person or organization without the official agreement of the principal person or organization, but the principal accepts the actions of the apparent agent, it is called
agency by ratification
A 1031 exchange does which if the following?
allows a taxpayer to defer taxes on a real estate transaction in certain circumstance
Before performing any actions for the principal party, a licensee must make sure that:
an agency relationship exists
A subagent is..
an unaffiliated broker working for the seller's agent who assists the seller's agent with a real estate transaction.