3100 Test

False

A broker acting as a special agent of the seller may initial changes to the contract on behalf of his client. True False

True

A broker acting as an agent for both the buyer-client and the seller-client in the same transaction may be an intermediary. True False

Correct! if the buyer requests to remain anonymous.

A broker representing the buyer may withhold the identity of the buyer from the seller if the broker is also a dual agent. Correct! if the buyer requests to remain anonymous. if the broker has a written agreement from both parties and the listing broker. if the seller consents.

present the offer to the seller as a potential back-up offer for further negotiation.

A buyer contracts to purchase a property from a seller for $87,000. Two weeks before closing, a buyer's agent for another company delivers an offer for $86,000. The listing associate should: not present the offer since the seller is already under contract with another buyer. present the offer to the seller as a potential back-up offer for further negotiation. reject the offer outright because it is lower than threject the offer outright because it is lower than the current contract price. not tell the seller, but hold the offer in the office in case the first contract fails to close.

Correct! False

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

the broker's opinion of value.

A customer would NOT be entitled to: the broker's opinion of value. the type and age of the existing roof. the lease termination date of the current occupant. repairs completed to correct the drainage problem.

Flase

A fiduciary must always act in the best interest of the customer. True False

statutory law.

A law enacted by the legislature is: legislative law. common law. case law. statutory law.

subagent.

A licensee who represents the client through a cooperative agreement with the client's broker is a/an: broker associate. buyer's agent. subagent. intermediary.

All of the above

A licensee who violates the fiduciary responsibility of loyalty to the client is guilty of unethical behavior. unprofessional behavior. illegal behavior. All of the above

recommend a negotiating strategy.

A licensee working with a buyer-customer could not: recommend a negotiating strategy. provide a list of local elementary schools. discuss financing options. reveal that the roof leaked when it rains.

False

A major advantage of nonexclusive single agency is that it permits in-house sales to buyers and sellers demanding representation in the same transaction. True False

that a reasonable person might feel is important.

A material fact is one he client considers important. the customer considers important. that a reasonable person might feel is important. that the listing broker considers important.

omission and/or commission.

A misrepresentation can be made by acts of integrity or omission. discipline and prudence. omission and/or commission. prudence or caution.

True

A salesperson licensee acts for the licensed broker with whom he or she is associated. True False

Net

A seller agrees to list his property with Firth of Clyde Realty. The broker's commission will be anything remaining from the proceeds of the sale once the seller's loan balance and closing costs are paid. The seller and Firth of Clyde Realty have what type of listing agreement? Exclusive right to sell Exclusive agency Open Net

Exclusive Agency

A seller listed his property exclusively with Saldivar Realty. Even though the property sold during the period of the listing, if the seller was not required to pay a commission to Saldivar Realty, what type of listing agreement probably existed between the seller and Saldivar Realty? Exclusive right-to-sell Exclusive agency Open Net

True

A seller's agent is an advocate of the seller. True False

False

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

intermediary agency.

A type of agency whereby the broker represents both buyer and seller is buyer/seller agency. express agency. open agency. intermediary agency.

point out the condition to the buyer then notify the listing associate about possible plumbing leaks and drainage problems.

Acting as a subagent, Lucy Liu shows a property to a buyer. Lucy notices water stains on the carpet near the entrance to the guest bathroom and on the vinyl tile at the back door. The buyer is greatly interested in the property. Lucy should: point out the condition to the buyer then notify the listing associate about possible plumbing leaks and drainage problems. ask the listing associate for the seller's written disclosure. If it is not on the disclosure, Lucy has no duty to inquire further. point the conditions out to the buyer. Lucy has no duty to notify the owner. do nothing. Pursuing possible property discrepancies is not the responsibility of the subagent.

100 percent loyalty and confidentiality for the buyer.

Advantages of exclusive seller agency would NOT include clearly defined agency lines. he lessening risk of conflicts of loyalty in selling their own listings. 100 percent loyalty and confidentiality for the buyer. a proven method of compensation.

False

Advice and opinion is given to a customer, never a client. True False

George remains a client of Bay Area Realty.

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? The buyer agency agreement became null and void as soon as Allisa transferred. George is now a client of Crystal City Realty. George remains a client of Bay Area Realty. George is now Allisa's client.

Make an exception to Aloha Realty's policy and show Bob the new listing.

Aloha Realty offers both seller agency and buyer agency, but does not offer services to buyers represented by Aloha Realty on properties listed by the firm. Jennifer, a sales associate for Aloha Realty, has shown Bob (one of the firm's represented buyers) numerous properties over the past few weeks. Another associate with Aloha Realty announces a new listing which Jennifer knows would be perfect for Bob. Given Aloha Realty's policy of non-exclusive single agency, which course of action is NOT available to Jennifer? Make an exception to Aloha Realty's policy and show Bob the new listing. Mutually agree with Bob to rescind their agency agreement and treat Bob as a customer. Mutually agree with Bob to rescind the agency agreement and refer Bob to another firm for representation. Mutually agree with the seller to rescind their agency agreement and treat the seller as a customer.

seller signed an agreement to pay a commission to the broker for selling the property.

Although a broker may enter into an oral listing agreement, the broker cannot look to the courts to compel the seller to pay a commission unless the broker signed the listing agreement. broker was a member of the Texas Association of Realtors ® and therefore authorized to use the TAR listing form. seller signed an agreement to pay a commission to the broker for selling the property. buyer authorized the broker's commission to be paid through the seller.

Correct! True

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. Correct! True False

general agency.

An owner of several single-family residential properties hires a licensed real estate broker to manage her properties. The licensee approves all tenants, signs all rental agreements, makes decisions regarding repairs, pays all expenses for the owner, and hires/fires all apartment employees. The relationship between the owner and the property manager is one of non-agency. universal agency. general agency. special agency.

False

Applicants for licensure must show evidence that they have completed a minimum of 20 classroom hours (two semester hours) in "Law of Agency". True False

nonexclusive single agency.

Argyll Realty provides representation services to both buyers and sellers but never acts as an intermediary. Argyll Realty practices exclusive buyer agency. exclusive seller agency. exclusive buyer/seller agency. nonexclusive single agency.

reject offers from prospective buyers which are below the listing price.

As an agent of the broker, sales associates generally do not give opinions as to the market value of residential properties. sign listing and buyer agency contracts. sign property management agreements. reject offers from prospective buyers which are below the listing price.

is always Bay Realty's customer.

Bay Realty practices exclusive seller agency. In an in-house sale, the buyer is always Bay Realty's client. is always Bay Realty's customer. may be either the client or the customer. must always be referred to as an exclusive buyer agency broker.

subagent of the listing broker's

Binnacle Realty practices exclusive seller agency. When selling another broker's listings, sales associates with Binnacle Realty will always seek to act as an agent of the buyer. subagent of the listing broker's client. an intermediary. a dual agent.

cannot disclose Harold's financial situation since he gained the information in the course of an agency relationship.

Broker Jimmy Salinas of Salinas Realty listed and sold a property for Harold Powers, during which time Jimmy became aware that Harold was about to file for divorce and bankruptcy. Harold now wishes to quickly purchase another property which is listed by another brokerage company on a seller financing arrangement. As a subagent of the seller, Broker Jimmy has a fiduciary duty to disclose Harold's financial situation to the listing broker. does not need to disclose Harold's financial situation since that is the seller's responsibility to investigate. cannot disclose Harold's financial situation since he gained the information in the course of an agency relationship. should tell the listing broker and let him decide how to proceed.

True

Buyers may purchase additional coverage for selected items not covered in the standard title insurance policy. True False

True

Common law evolves by custom or by court decisions: true false

False

Confidential information obtained about a client during a transaction must remain confidential only until the termination of the agency relationship. True False

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

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 Dewey was convicted of fraud and embezzlement. Correct! That Acme Realty expects to be paid by Dewey as well as the seller. All of the above hat Dewey was convicted of manslaughter.

Never

Due to the unique nature of the fiduciary responsibility of obedience, a licensee has an obligation to follow an unlawful instruction of a client under which circumstance? Only after consulting with an attorney Only if the licensee has a guarantee of immunity from prosecution Only if the client gives the licensee a written waiver of responsibility from both parties Never

treating them equally.

Duties to third parties (customers) by the licensee do NOT include treating them honestly. treating them fairly. treating them equally. disclosure of material facts.

a form prepared by a Texas attorney.

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. ny form prepared by the buyer. the form promulgated by the National Association of REALTORS ®. the TREC promulgated buyer representation form.

All of the above

If known, a subagent of the seller must disclose which fact about the financial status of the buyer? The buyer has not yet applied for the loan The buyer must sell his existing residence before a new purchase The buyer wants to assume the seller's existing loan because of his bad credit All of the above

Correct! the contract is voidable by the buyer.

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 void. the contract is enforceable as long as the seller gives oral disclosure. the contract is voidable by the seller. Correct! the contract is voidable by the buyer.

terminate the contract within seven days after receiving the notice.

If the seller's written notice of disclosure is not given by the effective date of the contract the buyer may terminate the contract within seven days after receiving the notice. refuse to pay the broker's commission. sue the seller for default on the contract. sue the listing broker.

Correct! is meant to provide a nonjudicial remedy for damages.

In Texas, earnest money Correct! is meant to provide a nonjudicial remedy for damages. is an essential element of a valid sales contract. must always be in the form of money, never commodity. is part of the consideration between the buyer and the seller.

Correct! is generally a nonissue.

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 Correct! is generally a nonissue. must be submitted for arbitration. will be extremely difficult. will be negotiated between the listing broker and the cooperating buyer's broker.

Correct! False

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

have a basic knowledge of real estate law.

In order to provide reasonable care and diligence to a client, a licensee must be prepared to give a legal opinion. have a basic knowledge of real estate law. work for a broker who also holds an attorney's license . meet the high standard of legal knowledge required of attorneys.

True

It is important that a licensee have a clear understanding of the difference between a client and a customer. True False

neither. Jane must be an intermediary

Jane Huang, a sales associate for Fair Winds Real Estate, has a listing contract to sell Suzi Lopez's office building. Jane has also agreed to work with Harry Regis in his attempt to purchase the building. The client(s) is (are) Suzi Lopez. neither. Jane must be an intermediary. Harry Regis. Harry Regis and Suzi Lopez.

Jasmine may act as a subagent, but only with full disclosure and permission of the seller.

Jasmine Smith, sales associate with Oak Ridge Realty, is contacted by her college roommate, Chelsea Nguyen, whom she has not seen or spoken to in 12 years. Chelsea's job has just relocated to town and she wants to purchase a condominium. If Jasmine acts as a subagent of the seller, which statement is true? The relationship need not be disclosed because too much time has elapsed. Texas law does not permit Jasmine to act as a subagent in this situation. Jasmine may act as a subagent, but only with full disclosure and permission of the seller. Jasmine must insist on a buyer agency relationship with Chelsea.

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

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 dvise John Byers of the outcome of the previous negotiations. terminate the buyer-client relationship with John Byers and treat him as a customer to avoid a conflict of interest with Global's other buyer-client. obtain the consent of the seller to proceed with negotiations on behalf of John Byers. Correct! obtain the consent of the other buyer-client to reveal the outcome of the previous negotiations to John Byers.

Correct! at the direction of the client or customer.

Licensees should make modifications to the promulgated TREC contract forms only at the discretion of the listing broker. at the discretion of both brokers. at the discretion of the buyer's broker. Correct! at the direction of the client or customer.

False

Megan's Law is a Texas law requiring the registration of sex offenders. True False

written or oral disclosure of agency.

Nearly every state requires: representation of the buyer. written or oral disclosure of agency. dual agency. representation of the seller.

False

On an in-house sale, the listing associate is permitted to make recommendations to the buyer-customer regarding the feasibility of having the seller pay selected items of the buyer's closing costs. True False

True

One of the benefits of exclusive seller agency is that the agent of the seller may not be responsible for the misinformation or misstatements of a material fact made by a buyer's agent to the buyer. True False

True

One of the disadvantages of exclusive seller agency is that the broker may lose buyers who want or need representation. True False

an agency relationship.

One person acting on behalf of another is: an agency relationship. a customer relationship. one person giving an opinion to another. one person giving advice to another.

True

Only the broker who has the privity of the written contract with the seller may initiate a lawsuit against his or her client. True False

Mediation services

Real estate brokers generally do not offer which basic services to sellers? Broad marketing strategy Advice and opinion Mediation services Confidentiality

should contact Blake, inform him of the news article, and encourage him to hold out a little longer.

Robert Hays, sales associate with West Point Realty, has listed a property for Blake Wong at $128,000. After three months, not a single offer has been received. Robert has been asking Blake to lower the listing price to $123,000. While reading the morning paper, Robert discovers that the local refinery will be relocating over 700 employees to the city within the next 60 days. The pay scale of these new employees puts them well within the price range for Blake's house. Robert then checks his voice mail and discovers a message from Blake from the evening before instructing Robert to lower the listing price to $119,000. At that price, the property is well within Robert's ability to purchase for himself. Robert should contact Blake, inform him of the news article, and encourage him to hold out a little longer. has a fiduciary duty to obey his client and lower the listing price to $119,000 immediately. should contact Blake and offer to purchase the property himself for $119,000. should turn the listing over to another associate in the office, then tender an offer for himself for $119,000.

the government right of eminent domain.

Standard title insurance coverage would not protect the buyer from the government right of eminent domain. forged documents. mentally incompetent sellers. incorrect marital status of the seller.

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

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 has no duty to disclose the retainer fee to the seller. Correct Answer Su Casa Realty must disclose the retainer fee to the seller and obtain permission from all parties to collect both fees. Non-refundable retainer fees are illegal in Texas. Su Casa Realty must share the retainer fee with the listing broker to make the transaction legal.

True

Texas law has given specific exemptions to sellers and real estate agents from a duty to disclose information relating to sex offenders. True False

False

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

False

The Texas Administrative Code is the law that establishes the duties of real estate licensees in Texas. True False

True

The Texas Board of Insurance regulates title insurance companies in Texas. True False

None of the above

The Texas Property Code requires a written seller's disclosure notice for all residential properties. certain residential properties. residential and commercial properties. None of the above

consists of six broker members and three public members.

The Texas Real Estate Commission (TREC): consists of six members. is selected by the state senate and approved by the governor. consists of six broker members and three public members. is replaced by the governor every two years.

sponsoring broker and the principal.

The agency relationship is established between the salesperson and the customer. broker associate and the customer. sponsoring broker and the principal. broker associate and the salesperson.

purchase title insurance or have an abstract of title examined by an attorney.

The best protection for a buyer who is concerned about the quality of the title might be to purchase title insurance. have an abstract of title examined by an attorney. insist on a property survey. purchase title insurance or have an abstract of title examined by an attorney.

excepted from the standard title policy.

The buyer pays cash for a vacant lot relying on the seller's old survey which showed the lot measured 180 feet by 260 feet. After commencing construction of his new home, he discovers the lot measures only 165 feet across the front and the neighbor behind him has a fence that encroaches nearly three feet across the back of the buyer's lot. These boundary shortages are excepted from the standard title policy. covered by the standard title policy. covered by the homeowner's insurance policy. covered under the builder's warranty for the new home.

True

The client has a legal right to expect advocacy. True False

True

The customer must be treated fairly by law, but not impartially or equally, relative to the client. True False

True

The duty of disclosure is greater to a client than to a customer. True False

False

The fact that child molestation occurred on a property would be an example of physical stigma which would have to be disclosed. True False

Correct! buyer's broker and the buyer.

The fee to be paid to a buyer's broker by a buyer-client is determined by agreement between broker and TREC. buyer's broker and the listing broker. buyer's broker and the seller. Correct! buyer's broker and the buyer.

False

The form called "Seller's Disclosure of Property Condition" is a promulgated TREC form. True False

Although Betty may explain each section of the form, she should neither mark the boxes nor sign on the seller's behalf.

The listing associate, Betty Principi, gives the seller the Seller's Disclosure of Property Condition. The seller says there is really nothing to disclose and since he broke his writing hand playing golf, he asks Betty to fill out and sign the form for him. Which statement is TRUE? Since she is acting under special agency, Betty has authority to fill out the form and sign on behalf of her client. Since Betty is only an agent of her broker, only her broker may fill out and sign on behalf of the client. To avoid liability, Betty should limit her activity to simply marking the boxes under the direction of the seller, but instruct the seller to have a friend or other family member sign on his behalf. Although Betty may explain each section of the form, she should neither mark the boxes nor sign on the seller's behalf.

Correct! the seller and the seller's broker.

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 Correct! the seller and the seller's broker. neither broker. the broker representing the seller. the broker representing the buyer.

Lender

The mortgagee's title insurance protects the buyer. lender. seller. broker.

exclusive single agency.

The practice of representing buyers or sellers exclusively is called intermediary. facilitation. exclusive single agency. dual agency.

all of the above.

The purpose of The Real Estate Licensing Act (TRELA) is: to provide the legal framework within which each licensee operates. to establish the duties of licensees in dealing with the public. all of the above. o detail the law regarding agency relationships as it pertains to licensees.

general agency.

The relationship between a broker and a sales associate is usually one of universal agency. general agency. non-agency. special agency.

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

The seller's acceptance of an offer from the buyer is effective at the instant the offer is signed by the seller. at the time of delivery to the subagent. at the time of delivery to the listing broker. Correct! at the time of delivery to the buyer or the buyer's agent.

True

The statutory language in the "Information About Brokerage Services" form provides consumers with information regarding roles that a real estate broker may play in a transaction. True False

False

The statutory statement regarding brokerage services required by TRELA must be presented to a potential buyer or seller not later than the effective date of the sales contract. True False

misrepresented by omission.

The subagent showing a property to a buyer forgets to mention that even though the property is connected to the city water and sewage, it also has an abandoned septic tank. The subagent has misrepresented by omission. misrepresented by commission. committed fraud. misrepresented by omission and commission.

exclusive right-to-sell listing.

The type of listing that gives the broker the greatest amount of security is the exclusive right-to-sell listing. exclusive agency listing. open listing. net listing.

express agency.

The written listing agreement between the broker and the seller creates an implied agency. agency by ratification. agency by estoppel. express agency.

False

There is a judicial trend toward the tradition of caveat emptor. True False

Broker

Which entity may act independently in conducting a real estate transaction? Broker Sales Associate REALTOR ® All of the above

All of the above

Which fact is material and therefore must be disclosed to a potential purchaser? A series of drive-by shootings in the neighborhood A neighbor who has frequent and loud parties several times a month The property was treated recently for a termite infestation All of the above

Inspection

Which is not a fiduciary obligation owed to a client? Diligence Accounting Confidentiality Inspection

Increased commission fees

Which is not noted as a reason for studying agency law? Increased complexity of transactions Increased litigation Increased commission fees Greater consumer expectations

A friend visiting the owner trips over the cat, falls into the pool and drowns

Which type of death on the property would a seller have to disclose? The suicide of a close relative The owner suffers a heart attack A friend visiting the owner slips and falls on the pool tile A friend visiting the owner trips over the cat, falls into the pool and drowns

not reveal the information.

While acting as a subagent, Harry Tanaka shows a property to a customer and becomes aware that the current owner suffers from AIDS. Two weeks later, Harry is now acting as an agent of a prospective buyer who also happens to be Harry's cousin. Harry may reveal the information since he is no longer in an agency relationship with the seller. not reveal the information. eveal the information because of his close relationship with the buyer. reveal the information with the consent of the owner.

should decline the listing.

While doing a listing brief with a potential seller, the sales associate is told that there was a major fire on the property which caused substantial damage two years ago. Since all renovations and repairs resulting from the fire were covered by the homeowner's insurance policy, the owner insists that potential purchasers should not be given information about the fire. The sales associate has no duty to disclose the fire since all repairs were completed. has a fiduciary duty to obey his client. should decline the listing. should take the listing but disclose the information anyway.

Correct! the special provisions paragraph of the TREC-promulgated contract.

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 an addendum prepared by the buyer's attorney. a TREC-promulgated addendum for seller financing. an addendum prepared by the seller's attorney. Correct! the special provisions paragraph of the TREC-promulgated contract.