Law of agency

Marketable Title

Title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept.

A real estate broker owes fiduciary duties to his/her principal...?

True

An agent may not be held liable for innocent acts of misrepresentation...?

True

An agent that can serve the principal in any capacity is known as a...?

Universal agent

The Texas Real Estate Commission was created in what year...?

1949

The Seller's Disclosure of Property Condition is discussed in what section of the Texas Property Code...?

5.008

Which of the following is considered a third party to a listing contract...?

A customer

Survey

A document which precisely shows the property lines, and size and location of improvements on a particular property.

Associate broker

A licensed real estate broker who chooses to work under the name and supervision of another licensed broker.

Associate licensee

A licensee who is licensed under a broker, or who has entered into a written contract with the broker to act as the broker's agent in a real estate transaction.

Fiduciary

A person in a position of trust and confidence, as between principal and broker; broker as a fiduciary owes certain loyalty which cannot be breached under the rules of agency.

Real Estate Broker

A person or an organization acting as the agent for others in negotiating the purchase and sale of real property or other commodities for a fee.

Real estate salesperson

A person performing any of the acts included in the definition of real estate broker but while associated with and supervised by a broker.

Which of the following receives advice, or an opinion, from a real estate broker...?

A principal

Which of the following can legally employ a real estate salesperson to work on their behalf...?

A real estate broker

If an individual works as an associate broker, who must they work under...?

A sponsoring broker

Abstract of Title

A summary or digest of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title.

This refers to a summary of all transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title, showing continuity of ownership, together with any other elements of record which may impair title...?

Abstract of title

This refers to the relationship between a principal and the principal's agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party..?

Agency

This refers to the relationship between a principal and the principal's agent, which arises out of a contract, wherein the agent is employed by the principal to do certain acts dealing with a third party...?

Agency

One who acts for and with authority from another, called the principal, is known as a/an...?

Agent

Confidentiality

An agent is obligated to safeguard his/her principal's lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal's bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property. The duty of confidentiality does not include an obligation by a broker who represents a seller to withhold known material facts about the condition of the seller's property from the buyer, or to misrepresent the property's condition. To do so constitutes misrepresentation and may impose liability on both the broker and/or the seller.

Universal agent

An agent that can serve the principal in any capacity.

General Agent

An agent with full authority over one property of the principal, such as a property manager.

Special Agent

An agent with limited authority to act on behalf of the principal, such as created by a listing contract.

Loyalty

An agent's duty to place the client's interest above those of all others, including the agent's own self-interest.

Puffing

An expression or exaggeration made by a salesperson that concerns the quality of real property offered for sale or lease. It presents opinions rather than facts about real property.

Material fact

Any fact that would influence the decision of a reasonably prudent person.

A licensed real estate broker who chooses to work under the name and supervision of another licensed broker is known as a/an...?

Associate broker

In order to establish an agency relationship, which of the following must agree to the terms of the agency...?

Both the principal and agent

Prior to signing a listing agreement, a party in a real estate transaction who will employ an agent is known as a/an...?

Client

A law that is made by a judge's decision in a court case is known as...?

Common law

Which of the following duties are owed to a third party in a transaction...?

Competency Good faith Fairness

According to this fiduciary duty, an agent cannot disclose their principal's motives for selling their property...?

Confidentiality

According to this fiduciary duty, an agent must keep confidential any information that may weaken the principal's bargaining position...?

Confidentiality

An agent's duty to be honest with all parties may be compromised by which fiduciary duty owed to the principal...?

Confidentiality

If a broker enters into a listing contract with a seller, what duties does the broker owe to prospective buyers...?

Disclosure of material facts

According to the fiduciary duty of obedience, the agent must obey a principal's unlawful instructions...?

False

An agent must provide customers with advice if asked by the customer...?

False

By signing a listing agreement with a principal, an agent can serve as a universal agent to the principal...?

False

The real estate broker is responsible for ordering the appraisal for a transaction...?

False

A person in a position of trust and confidence is known as a/an...?

Fiduciary

A person in a position of trust and confidence, as between a principal and broker is known as a...?

Fiduciary

Ely is a real estate broker who represents that seller in a transaction. Ely owes which of the following to the seller...?

Fiduciary duties

The duty to not to obtain any advantage over a principal by the slightest misrepresentation, concealment, duress or pressure is known as a...?

Fiduciary duty

If an agent learns of something that is beneficial to their principal, the agent must reveal the information to the principal as per this fiduciary duty...?

Full disclosure

What fiduciary duty does a seller's broker owe to a customer...?

Full disclosure

Agency can be classified in which of the following ways...?

General agency Special agency Universal agency

A property manager is an example of a...?

General agent

Since an agent owes the duty of confidentiality to his/her principal, which of the following duties owed to a customer may be compromised...?

Honesty

Real estate agents operate as a/an ................to their sponsoring broker?

Independent contractor

Which of the following is signed between an agent and their sponsoring broker...?

Independent contractor agreement

Title Insurance

Insurance to protect a real property owner or lender up to a specified amount against certain types of loss (ex: defective or unmarketable title).

A broker who represents both the buyer and seller in the same transaction operates as a/an...?

Intermediary

Common Law

Law that is derived from court decision. The body of law that grew from custom and practices developed and used in England "Since the memory of man runneth not to the contract".

Statutory Law

Law that is set down by a body of legislation or by a singular legislator.

According to the fiduciary duty of obedience, the agent must obey which of the following instructions from the principal...?

Lawful instructions

Which of the following contracts establishes an agency relationship between the seller and broker...?

Listing agreement

Which of the following contracts can establish an agency relationship...?

Listing agreement Buyer representation agreement Property management agreement

This is an agent's duty to place their client's interest above those of all others, including the agent's own self-interest...?

Loyalty

This refers to title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept...?

Marketable title

Any fact that would influence the decision of a reasonably prudent person is known as a/an...?

Material fact

An agent must disclose which of the following to a prospective buyer...?

Material facts about the property

A false statement regarding a material fact is known as...?

Misrepresentations

An agent must avoid doing which of the following to a customer...?

Misrepresenting material facts about the property

The party the agent brings to the principal as seller or buyer of the property.

Non-client

Agent

One who acts for and with authority from another called the principal.

The party that the listing contract is with is referred to as the...?

Principal

Client

Prior to signing a listing agreement, a party in a real estate transaction who will employ an agent.

The Information About Brokerage Services form is presented by the broker to the...?

Prospective client

An expression or exaggeration made by a salesperson that concerns the quality of real property offered for sale or lease is known as...?

Puffing

A listing contract is signed between a principal and a...?

Real estate broker

A person acting as the agent for others in negotiating the purchase and sale of real property for a fee is known as a/an...?

Real estate broker

Which of the following has the highest authority in an agency relationship...?

Real estate broker

An agent owes which of the following fiduciary duties to their principal...?

Reasonable care and diligence

Which of the following can serve as a principal...?

Seller Buyer Lessor

Abby signs a buyer representation agreement with a buyer. What type of agency was created by the agreement...?

Special agency

Which of the following is the most restrictive type of agency...?

Special agency

A real estate agent is an example of a...?

Special agent

Abby is a real estate broker who represents a seller in a transaction. Abby is serving as what type of agent...?

Special agent

A law that is written by a legislating body is known as...?

Statutory law

This is a document which precisely shows the property lines, and size and location of improvements on a particular property...?

Survey

Which of the following is responsible for enforcing TRELA...?

TREC

The acronym TRELA stands for which of the following...?

Texas Real Estate License Act

The rules and regulations regarding real estate licenses in Texas are described in which of the following...?

Texas Real Estate License Act

Fiduciary duty

That duty owed by an agent to act in the highest good faith toward the principal and not to obtain any advantage over the latter by the slightest misrepresentation, concealment, duress or pressure.

Which of the following is an example of fairness owed by a seller's agent to a customer...?

The agent must present all offers received from perspective buyers

An agent's duty of honesty and fairness applies to which parties...?

The client The customer The principal

An agent owes the fiduciary duty of reasonable care to which of the following parties in a transaction...?

The customer The principal The client

Reasonable Skill and Care

The degree of care and skill ordinarily used by others competently engaged in the same business.

Principal

The employer of an agent; one of the main parties in a real estate transaction, such as a buyer, borrower, seller, or lessor.

Obedience

The fiduciary relationship that obligates the agent to act in good faith at all times, obeying the client's instructions in accordance with the contract.

Which of the following orders the appraisal for a transaction...?

The lender

Customer

The party the agent brings to the principal as seller or buyer of the property.

customer

The party the agent brings to the principal as seller or buyer of the property.

The authority of an agent is provided by which of the following...?

The principal

Agency

The relationship between principal and the principal's agent which arises out of a contract, either expressed or implied, written or oral, wherein the agent is employed by the principal to do certain acts dealing with a third party.

discourse

The release of relevant information about a property that may influence the final sale, especially if it represents defects of problems.

Who is responsible for completing the Seller's Disclosure of Property Condition form...?

The seller

Which of the following is a possible red flag from a seller...?

The seller refuses to disclose certain information on the Sellers Disclosure form