Chapter 4 - Real Estate Brokerage & Law of Agency

Real Estate Broker

A person who is licensed to buy, sell, exchange, or lease real property for others and to charge a fee for these services.

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.

A buyer's earnest money should be deposited in which of the following...? The broker's account The seller's account An escrow account Any of the above

An escrow account

The fiduciary duty of care when representing a buyer includes which of the following services...? Assisting with counter offers Evaluating terms and conditions from any offers on the property Disclosing information learned from the seller's broker All of the above

Assisting with counter offers

The seller must allow their agent to show the property to prospective buyers. This is an example of what responsibility owed by the seller to the agent...? Availability Care Disclosure Accounting

Availability

A defect known to the seller but not to the buyer, and is not discoverable by ordinary inspections is referred to as a/an...? Latent Defect Non-structural Defect Structural Defect Insignificant Defect

Latent Defect

A broker must always place his/her client's interests above their own. This is an example of what fiduciary duty...? Disclosure Loyalty Care Accounting

Loyalty

Brokerage

The business of making sales and purchases for a commission; a broker.

Principal

The employer of an agent

Customer

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

According to the Texas Deceptive Trade Practices Act, businesses with assets exceeding .............. are not considered consumers? $1,000,000 $5,000,000 $10,000,000 $25,000,000

$25,000,000

Listing Contract

A contract in which a property owner employs a real estate broker to market the property described in the contract.

Implied Agency

Agency that exists as a result of actions of the parties.

An agency relationship may be terminated by which of the following? Destruction of the property Expiration of the term of an agency Mutual agreement of the parties All of the above

All of the above

Which of the following is owed to a customer by an agent...? Reasonable care and skill Honesty Disclosure of any known material facts All of the above

All of the above

Express Agency

An agency relationship created by oral or written agreement between principal and the agent.

The 'C' in the acronym C.O.A.L.D. stands for which fiduciary duty...? Consideration Co-sign Care Conditional

Care

When a buyer is required to examine the property and buy at his/her own risk, it is referred to as...? Caveat Emptor Indemnification Fraud Calculated Risk

Caveat Emptor

The 'C' in the acronym C.I.I.A. stands for...? Care Consideration Confidentiality Compensation

Compensation

The Texas Deceptive Trade Practices Act defines this individual as someone who seeks, or acquires, by purchase or lease, any goods or services...? Agent Principal Client Consumer

Consumer

This Act protects consumers against false, misleading, or deceptive acts...? Deceptive Trade Practices Act Consumer Protection Act Fair Trade Act Texas Consumer Act

Deceptive Trade Practices Act

A broker must inform their clients of all known facts related to a transaction. This is an example of what fiduciary duty...? Disclosure Loyalty Care Accounting

Disclosure

A seller's broker is required to tell their client any relationship they may have with the buyer. This is an example of which fiduciary duty...? Loyalty Disclosure Care Accounting

Disclosure

Real estate agents cannot be held liable for any false or misleading information about a property...? TRUE FALSE

FALSE

Which of the following is owed to a customer by an agent...? Honesty Accounting Availability Indemnification

Honesty

This reimbursement or compensation paid to someone for a loss already suffered is known as...? Indemnification Consideration Arbitration Conversion

Indemnification

According to this responsibility, the seller must always provide any known material facts about the property...? Care Information Loyalty Accounting

Information

The exaggeration of the good points of a product, or real property, and the prospects for future rise in value, profits, and growth is known as...? Redlining Novation Puffing Steering

Puffing

Indemnification

Reimbursement or compensation paid to someone for a loss already suffered

The seller is required to provide buyers with which of the following documents...? Survey Property Inspection Report Seller's Disclosure Notice Property Condition Report

Sellers Disclosure Notice

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.

A sellers agent is entitled to commission after? The agent finds a buyer who is ready, willing, and able to purchase the property The buyer closes on the transaction The seller agrees to pay the commission All of the above

The agent finds a buyer who is ready, willing, and able to purchase the property

Puffing

The exaggeration of the good points of a product, of real property, and the prospects for future rise in value, profits, and growth.

Fraud

The intentional and successful employment of any cunning, deception, collusion, or artifice, used to circumvent, cheat or deceive another person whereby that person acts upon it to the loss of property and legal injury.

Agency

The relationship between the 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.

A broker as a fiduciary owes certain loyalty, which cannot be breached under the rules of agency...? TRUE FALSE

True

Agent

a person who acts or does business for another

A broker will work for a client and with a...? Principal Customer Agent None of the above

customer

The sale of the property results in the ............................ of the agency relationship? Beginning Creation Termination

termination