Chapter 5
Assuming there is a valid written buyer representation agreement, what action can the buyer's agent take to receive compensation if the listing broker is never paid once a real estate transaction has closed?
The answer is the buyer's agent can request payment from the buyer.
Broker Sue of Holy Loch Realty has scheduled several showings for Gus, a buyer-client. One of the showings is for a property on Loch Awe Road. Three years ago, Sue was in a buyer-agency relationship with the current owner in the purchase of that property. In regard to the property on Loch Awe Road, which of the following is the BEST answer?
The answer is Sue must disclose all of these. Because Sue had a previous agency relationship with the owner of the property, she must remember that any information obtained during that agency relationship remains confidential. Furthermore, she must inform her current client of her previous relationship with the now seller-customer. She has both legal and ethical responsibilities to inform both parties of any relationships that could impact on her ability to provide 100% loyalty to the client.
If a buyer is purchasing a property that will be financed by a Department of Veterans Affairs (VA) loan,
The answer is a buyer's broker fee cannot be included in the loan amount.
A Broker is NOT required to provide a broker price opinion to which of the following?
The answer is a customer.
Which of the following is a TRUE statement regarding license holder advertising?
The answer is a license holder may not imply that a sales agent is responsible for operating a brokerage firm.
Which of the following is a benefit enjoyed by buyers who enter buyer-agency relationships?
The answer is access to a larger marketplace.
Which of the following are buyer-paid compensation?
The answer is all of these. Buyer-paid compensation can take several forms, such as an hourly rate, a percentage fee, or a flat fee.
In which of the following capacities can a license holder work with a buyer?
The answer is all of these. License holders can act as agents of buyers, subagents of sellers, or as an intermediary for both parties.
Tom is the buyer's 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 the buyers?
The answer is at first contact.
License holders do NOT need to disclose to buyers that they are license holders if the license holders are selling a property on
The answer is behalf of the license holder's best friend.
In which of the following situations would having a buyer-agency relationship be necessary to the buyer?
The answer is buyer wants to remain anonymous.
The fee to be paid to a buyer's broker by a buyer-client is determined by agreement between
The answer is buyer's broker and the buyer.
When determining whether to require a retainer fee, a broker should
The answer is establish a consistent fee policy for all clients.
Ruth, a buyer's broker, asked the listing broker if she is willing to split the commission on a transaction. The listing broker would not agree to the split. What should Ruth do?
The answer is explain the situation to the buyer.
Under the TREC-promulgated Information About Brokerage Services Notice, there are blank spaces on the last page that are used for what purpose?
The answer is for the person receiving the notice to acknowledge receipt of the notice.
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,
The answer is generally a nonissue.
What is the purpose of the sentence on page 9 of the TREC One to Four Residential Contract regarding a listing broker's payment of fees to the other broker?
The answer is it is only a notice to the parties about the listing broker and other broker fee split.
Which of the following is an advantage of exclusive buyer agency?
The answer is it reduces the possibility of the unauthorized representation of more than one party.
Which of the following is TRUE regarding anonymity of a buyer principal?
The answer is maintaining the anonymity of a famous buyer may keep the seller from increasing the asking price.
Is an agency relationship required to work with a buyer in acquiring real estate in Texas?
The answer is no, an agency relationship is not required.
Jared represents the buyer but failed to get a written buyer representation agreement signed by the buyer. Jared is not worried because he assumes that the TREC contract broker information about the fee split between brokers is sufficient to establish his right to payment. Can Jared rely on this statement to file an action against the buyer for his share of the commission?
The answer is no, because the statement in the TREC contracts regarding the fee to be shared between the listing broker and the other broker is merely information for the buyer and the seller.
Is a buyer's agent held to the same standard of skill and care in dealing with the buyer as the seller's listing agent working with the buyer?
The answer is no, the buyer's agent is held to a higher standard.
Which of the following is typically NOT addressed in a buyer/tenant representation agreement?
The answer is property description. Since the buyer typically has not chosen a specific property, a property description is included in a buyer representation agreement.
When a buyer forms an agency relationship with a broker, the buyer can expect that the broker will
The answer is provide data relating to market values for properties that the buyer may be interested in purchasing.
Exclusive buyer's brokers do not
The answer is take listings. Exclusive buyer's brokers do not take listings, because they represent the interest of buyers.
The buyer/tenant representation agreement belongs to which of the following?
The answer is the broker.
Who is the primary agent of the buyer in a buyer/agent relationship?
The answer is the broker.
A license holder is required to disclose that the license holder is a broker or sales agent in all of the following real estate transactions, EXCEPT when acting on behalf of
The answer is the license holder's sibling.
Which of the following is a disadvantage of exclusive buyer agency representation?
The answer is the possibility of earning commissions from both the listing side and the selling side of the business is eliminated.
Betty represents Nash under a written buyer representation agreement. Before signing the buyer representation agreement with Betty, Nash spoke with James and explained that he was looking for a two-bedroom condo near downtown Seattle. James did not sign a buyer representation agreement with Nash, but James did show Nash the same condo Nash eventually ended up buying with Betty's assistance. James believes that he is owed the commission because he was the first one to show Betty the condo. James is alleging that he is
The answer is the procuring cause of the sale to Betty.
A nonexclusive single agency broker is meeting with a prospective buyer to discuss whether the broker's services would be a good "fit" for the consumer. Why should the broker show all the firm's listings to a consumer before agreeing to represent that buyer as a client?
The answer is to avoid a potential conflict of interest if the buyer wants to purchase an in-house listing.
In which of the following situations is a broker/seller NOT required to provide a written disclosure regarding the broker's license status?
The answer is when the broker is selling property for the broker's sister.
When is a buyer's commission earned under a typical buyer representation agreement?
The answer is when the buyer and seller execute a contract to purchase.
Is subagency allowed in buyer representation?
The answer is yes, an agent can be a subagent of a buyer's agent.
Must a buyer's agent disclose his relationship with a buyer to an owner who is selling a property on her own?
The answer is yes, at first contact. If a property is not listed, the buyer's agent should disclose the relationship to the seller at first contact and make any requests for compensation from the seller at that time.
Is it permissible for a seller to pay a buyer's broker fee?
The answer is yes, it should be stated in the contract.
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?
The answer is yes, they automatically represent Sterling.
