Texas Law of Agency- CE Source
Does Texas law hold principals responsible for the unauthorized acts of their agents? 1. No, unless the acts are illegal.. 2. Yes, agents and principals are seen as the same person.. 3. No, unless they are aware of the acts.. 4. Yes, principals are liable even when agents are not..
C
Fred Sanders is a sales associate working for American Home Real Estate. Fred receives a check on the 15th and 30th of each month, which eases his personal budgeting. To receive these regular draws on his share of commissions, Fred has signed a note with the broker, which helps maintain Fred's status as 1. tax-exempt.. 2. employee.. 3. independent contractor.. 4. subagent..
C
If the seller fails to provide the required seller's disclosure of property condition by the time specified in the contract, the contract is 1. void.. 2. voidable by the seller.. 3. voidable by the buyer.. 4. enforceable, as long as the seller gives oral disclosure..
C
MLS systems offer which of the following types of agency to participants? 1. Mandatory subagency. 2. Mandatory buyer agency. 3. Optional subagency. 4. Nonexclusive seller agency.
C
Nonexclusive seller agency brokers will 1. only represent buyers/tenants.. 2. only represent sellers/landlords.. 3. represent buyers/tenants and sellers/landlords, but only if each agrees to allow intermediary brokerage.. 4. represent buyers/tenants or sellers/landlords, but not in the same transaction..
C
The fee to be paid to a buyer's broker by a buyer-client is determined by agreement between 1. buyer's broker and the listing broker.. 2. buyer's broker and the buyer.. 3. buyer's broker and the seller.. 4. broker and TREC..
2. buyer's broker and the buyer..
Benefits of seller agency relationships to the seller do NOT include 1. receiving advice and opinions that inform the seller throughout the transaction.. 2. having the commissions paid by the buyer.. 3. receiving assistance in contract negotiations.. 4. knowing that the information that could adversely affect the seller's interests in marketing the property or in negotiating the contract will be kept confidential..
2. having the commissions paid by the buyer..
Authority not specifically granted to the agent by the principal but necessary or customary if the agent is to perform agency duties is called 1. constructive notice.. 2. imputed notice.. 3. express authority.. 4. implied authority..
D
Debbie is the designated broker for Shetland Realty. She counsels Jenny, a sales associate, that Jenny must stop wearing miniskirts to work, start attending all sales meetings, be at her desk Monday through Friday by 9:00 am, and sign up for two Saturday duties every month. Debbie is jeopardizing Jenny's 1. civil rights.. 2. sales agent's license.. 3. REALTOR® Code of Ethics.. 4. independent contractor status..
D
Must a buyer's agent disclose his relationship with a buyer to an owner who is selling a property on her own? 1. No. 2. Yes, at first contact. 3. Yes, if the owner asks. 4. Yes, before presenting an offer.
B
Which entity may act independently in conducting a real estate transaction?
Broker
A professional real estate licensee 1. is skilled in every area and never needs the help of other professionals.. 2. is protected by the common law for making errors and misrepresentations when giving advice and counsel about technical areas for which they are neither licensed nor experienced.. 3. may do a home inspection as part of the duties and responsibilities of the holder of a real estate license.. 4. knows when it is time to enlist the help of other professionals..
4. knows when it is time to enlist the help of other professionals
Standard title insurance coverage would NOT protect the buyer from 1. forged documents.. 2. mentally incompetent sellers.. 3. incorrect marital status of the seller.. 4. the government right of eminent domain..
4. the government right of eminent domain
Under which of the following scenarios would a real estate license be required? 1. A person acts as an agent for another person in a real estate transaction and expects to be paid a fee.. 2. A person acts as an agent for a business in a real estate transaction for free.. 3. A person acts as an agent for another person in a real estate transaction at no cost.. 4. A person buys and sells real estate on his own behalf without an agent. .
1. A person acts as an agent for another person in a real estate transaction and expects to be paid a fee..
Buyers may hear that the TREC-promulgated contract forms for residential sales contain some buyer compromises and want their buyer's agent to help them prepare an addendum to the contract. Which of the following guidelines should a licensee follow in this situation? 1. You are not an attorney and must avoid the unauthorized practice of law.. 2. You have a fiduciary responsibility to the buyer and must protect those interests.. 3. You can rely on the seller's attorney for legal advice if you are using standard TREC forms.. 4. You cannot use an addendum with a TREC contract..
A
Exclusive buyer's brokers do not 1. take listings.. 2. represent buyers.. 3. split commissions.. 4. charge retainer fees..
A
To make a misrepresentation claim against a broker, the buyer must have 1. witnesses to the misrepresentation.. 2. suffered damages.. 3. physical proof of the misrepresentation.. 4. collaboration from the seller..
2. suffered damages
One of the principals to a real estate transaction is considered which of the following? 1. An offeror. 2. An offeree. 3. A party . 4. A broker .
3. A party - A broker is not a party in the real estate transaction but may be a party to a listing agreement..
How should a real estate licensee explain to buyers the value of having a licensed property inspector complete an inspection on a subject property? 1. An inspector is not necessary because of the provision of the Seller's Disclosure Notice (formerly the Seller's Disclosure of Property Condition).. 2. Licensed property inspectors provide warrantees on inspected equipment.. 3. Having an inspector complete it is better than relying thoroughly on the Seller's Disclosure Notice (formerly the Seller's Disclosure of Property Condition).. 4. Property inspections by licensed inspectors are likely to reveal material defects that can be used in further negotiations with the seller..
3. Having an inspector complete it is better than relying thoroughly on the Seller's Disclosure Notice (formerly the Seller's Disclosure of Property Condition)..
Broker Bob operates an office with five sponsored salespeople. Bob is the agent representing seller Sam on the sale of his ranch. Steve, a sales agent who is sponsored by Bob, overhears a conversation in which Sam says he'd be willing to divide the land into smaller parcels if he does not have a reasonable offer within 90 days. Steve's cousin would like to buy a portion of Bob's land. Can Steve share what he overheard to help the client with an eventual sale? 1. Yes, Steve can share this information because he is not the agent of record.. 2. Yes, Steve can share this information because he want to assist in a sale.. 3. No, Steve shares the obligations of loyalty and confidentiality to the broker's client.. 4. No, Steve has no authority to discuss the property with anyone because he is not the agent..
3. No, Steve shares the obligations of loyalty and confidentiality to the broker's client..
What is the name of the form that MOST sellers must use to disclose that a property meets Texas Property Code? 1. Seller's Disclosure of Property Condition. 2. Texas Property Code Inventory. 3. Buyer's Right-to-Know Report. 4. Basic Property System Disclosure.
A
Which event would be an example of termination of agency by operation of law? 1. Death of the broker's spouse. 2. Death of the owner. 3. Arrest of owner for embezzling funds from his company's account. 4. A drive-by shooting resulting in a death on the property.
B
Which of the following is NOT a third party to a listing agreement? 1. A buyer. 2. A lender. 3. A broker. 4. An inspector.
3. a broker
A recent homebuyer believes that she overpaid for a property because no one informed her that a nearby vacant lot was being rezoned for commercial use. A discount hotel is planned for the site. The broker said he did not think that information was relevant to the buyer. Which of the following must the homebuyer prove in order to make a misrepresentation claim against the broker? 1. The broker failed to ask her if having a hotel nearby would concern her.. 2. The broker and the owner conspired to withhold the rezoning information.. 3. The broker should have known the rezoning should be disclosed.. 4. The owner ordered the broker to conceal the rezoning information..
3. The broker should have known the rezoning should be disclosed..
Which of the following statements BEST describes the relationship between a sales agent and a client in a real estate transaction? 1. The sales agent is a special agent of the client.. 2. The sales agent is not an agent of the client.. 3. The sales agent is a general agent of the client.. 4. The sales agent is a subagent of the client. .
3. The sales agent is a general agent of the client..
According to TREC, a broker must develop company policies and procedures manual on agency so that each sponsored sales agent understands the scope of authorized activities and can 1. competently conduct those activities.. 2. benefit financially from those activities.. 3. differentiate employees from independent contractors.. 4. delegate responsibilities to nonlicensed assistants..
A
Jerry, a sales associate with Cervantes Realty, has been showing an investor numerous properties over the past few months. The investor is knowledgeable about the real estate industry and the local market and prefers to represent himself. Property listed in the MLS would be ideal for the investor; however, Bay Realty, the listing office, does not offer subagency. Which alternative is available to Jerry? 1. Agree to provide Bay Realty the name of the customer in exchange for a referral fee should the customer purchase the property.. 2. Show the property and then ask the local board of REALTORS® to mediate the commission split.. 3. Show the property and then sue Bay Realty for failure to compensate.. 4. Ask the investor for a flat transaction fee to assist with writing up a contract and to act in a nonagency capacity for this transaction..
1. Agree to provide Bay Realty the name of the customer in exchange for a referral fee should the customer purchase the property..
In Texas, what is the popularity trend of exclusive seller agency? 1. It is in decline.. 2. It is rising.. 3. It remains at a constant level.. 4. Exclusive agency is not legal in Texas..
1. It is in decline..
Because a buyer is said to have equitable title to a property, any interference with a contract that affects the buyer's rights is called 1. tortious interference.. 2. subversion.. 3. contractual interference.. 4. subordination..
A
Before listing the property, the seller 1. should be given a copy of the listing contract to review.. 2. should only be given a summary of the listing contract highlights.. 3. should not be given anything about the listing contract because it will raise too many questions in the seller's mind, and he may decide not to list with your brokerage.. 4. should be given a copy of a listing contract that you have completed for another seller-client..
A
Deceptive acts in a real estate transaction may have a greater impact on the consumer than in other areas because 1. laws place substantial responsibility on brokers for the acts of their sales associates.. 2. most real estate transactions involve large sums of money.. 3. there is a risk of misunderstanding and error as a result of information being transmitted through information is transmitted through a third party rather than through direct communication between buyers and sellers.. 4. all of these are reasons for a greater impact on the consumer..
A
How many members of The Texas Real Estate Commission (TREC) must be licensed as real estate brokers? 1. 6. 2. 3. 3. 9. 4. 12.
A
In an action for fraud, a plaintiff must prove the real estate agent 1. acted with intent.. 2. made a huge mistake.. 3. made money on the transaction.. 4. made an innocent error that directly resulted in the plaintiff's financial loss..
A
The lead-based paint addendum must be provided in the sale of which of the following properties? 1. Housing built before 1978. 2. Housing built before 1992. 3. Housing built before 1996. 4. Commercial warehouses built before 1978
A
The oldest and MOST recognized ethical code within the real estate industry is the 1. REALTOR® Code of Ethics.. 2. Canons of Professional Ethics and Conduct.. 3. golden rule.. 4. Rules of the Texas Real Estate Commission..
A
Tom was a buyer broker for Patrick when they purchased the home next to Paul, who is Peter's brother. When Tom showed Patrick the property, Tom said that the roof had been replaced five years ago, when he knew that the roof was really 10 years old. Patrick insisted on placing a higher offer on the property than Tom advised because he was intent on living next to his brother. When the roof leaked, Patrick later accused Tom of fraud. Will Patrick be successful in his fraud case against Tom? 1. No, Patrick did not rely on the roof information to make his decision to buy.. 2. Yes, Tom knew the roof was older than he said it was.. 3. Yes, Tom should have advised Patrick on making a low bid to compensate for the roof.. 4. No, as a broker, Tom does not need to be an expert on the age of roofs..
A
What is boycotting? 1. An agreement among competitors to not do business with targeted individuals or businesses. 2. An agreement among competitors that raises, lowers, or stabilizes prices or competitive terms. 3. An agreement among competitors to divide sales territories or assign customers. 4. An agreement among competitors to not compete.
A
Which of the following is NOT a violation of federal antitrust laws? 1. Discrimination. 2. Price-fixing. 3. Group boycotts. 4. Customer allocation.
A
Which of the following statements BEST defines ethics for real estate professionals? 1. The minimum standards of appropriate conduct. 2. The laws and judicial decisions. 3. The expectations of the majority of participants. 4. The current practices and trends.
A
Which topic should a licensee discuss with a consumer who needs to conduct a complex transaction even before offering to assist the consumer in a transaction? 1. What the licensee can and cannot do. 2. The relationship between client and broker. 3. Subagency and an MLS. 4. TRELA's nondiscrimination policies.
A
Why should a listing broker who decides to offer other brokers a less-than-attractive commission split be sure a property owner understands this intent? 1. It may mean that other brokers will be less motivated to find a suitable buyer.. 2. The owner may want to supplement the fee offered to other brokers.. 3. The owner's pricing strategy could be impacted.. 4. The listing broker may need to make appointments for the transaction..
A
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, 1. is generally a nonissue.. 2. will be extremely difficult.. 3. must be submitted for arbitration.. 4. will be negotiated between the listing broker and the cooperating buyer's broker..
A.
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? 1. To impress the customer with the number and types of listings. 2. To avoid a potential conflict of interest if the buyer wants to purchase an in-house listing. 3. To determine whether the customer knows any of the broker's current clients. 4. To learn whether the types of properties the brokerage lists are appealing to the customer.
B
A specific termination date is required in a buyer's representation agreement under which of the following laws or rules? 1. The Rules of the Texas Real Estate Commission. 2. The Texas Real Estate License Act. 3. The Texas Association of REALTORS® Code of Ethics. 4. The Canons of Professional Ethics promulgated by the Texas Real Estate Commission.
B
According to TRELA, which entity is eligible to hold a broker's license in Texas? 1. Harry Smith, resident of Texas. 2. All may hold a broker license in Texas. 3. Happy Homes, a Texas corporation. 4. Sonia Martinez, a Texas attorney.
B
Both buyer Betty and seller George gave written authorization for broker Terry to act as an intermediary but without appointments should the situation arise. Betty expresses interest in George's property. In regards to the intermediary transaction that now might arise, TRELA would require 1. that Terry immediately notify both parties in writing.. 2. no further notification to the parties from Terry, although it would be prudent to do so.. 3. either written or verbal notification from Terry to both parties.. 4. that Terry terminate at least one of the agency relationships..
B
Prospective customers ask the listing agent "How long do you think this current roof will last?" Which of the following responses is BEST for the agent? 1. "You won't have to worry about the roof. The owners only bought the best.". 2. "The roof was put on 10 years ago, and the owners were given a 30-year warranty.". 3. "I have the same roof. It cost me more than others, but I expect it to last 30 years.". 4. "The warranty is for 30 years, but I can't really say how long it will last.".
B
To be able to appoint licensees to the buyer and the seller, the broker must have which of the following? 1. At least one associate in order to appoint one to the buyer and to appoint himself to the seller. 2. Written consent to act as an intermediary and written consent to make appointments. 3. At least one branch office to appoint the branch to the buyer and to appoint himself to the seller. 4. Written consent to act as an intermediary and oral or written consent to make appointments.
B
Under DTPA, "documentary material" would include all of the following EXCEPT 1. a tape recording of phone conversations.. 2. hearsay conversation.. 3. notes made on napkins at a restaurant.. 4. a rough draft of the buyer's representation agreement with the broker..
B
A broker is a subagent of the seller, and the buyer is represented by another agent. The broker must 1. provide the IABS written disclosure.. 2. provide the IABS disclosure either orally or in writing.. 3. disclose to the buyer, either orally or in writing, that the broker is an agent of the seller.. 4. act as an intermediary for the seller, at all times remaining neutral in the transaction..
C
A prospective buyer has telephoned a licensee to inquire about a property listed by the licensee's associated broker. Which of the following statements from the licensee might cause unintended dual agency? 1. "I can get you in to see that home this afternoon.". 2. "I am pleased to be handling that house.". 3. "I can make sure you get the best price possible on that house.". 4. "I think that house will meet all of your needs.".
C
Broker Judd is acting as a buyer's broker for Carlton. A broker across town with a listing for a property that would be suitable for Carlton offers Judd an attractive offer for subagency on the listing. What must Judd do? 1. Accept the offer for subagency. 2. Accept the offer for subagency and inform his client. 3. Reject the offer for subagency. 4. Try to negotiate an intermediary relationship with the listing broker.
C
Rosie Ruiz, a listing associate with Camp Zama Realty, does not mention to a prospective buyer that the 100-acre tract of land might soon be incorporated within the city limits. The announcement was in the local paper that morning. Rosie had not read about it because she seldom bothers to read the paper. Rosie has 1. misrepresented by commission.. 2. committed fraud.. 3. misrepresented by omission.. 4. misrepresented and committed fraud..
C
The Seller's Disclosure Notice (formerly Seller's Disclosure of Property Condition form) is required to be provided in which of the following real estate transactions? 1. Residential real property comprising not more than two dwelling units or duplex. 2. Residential and commercial real property with no limitation on size. 3. Residential real property comprising not more than one dwelling unit. 4. Commercial real property only.
C
When first dealing with a prospective buyer-customer, it would NOT be appropriate for broker Isaac to 1. present and discuss the statutory written statement regarding brokerage services, and caution the buyers that the broker is not the buyer's agent unless and until a consensual agreement has been reached.. 2. explain the difference between customer-level and client-level service.. 3. explain that market trends recently have been toward a very strong buyer's market.. 4. discuss financing alternatives..
C
Which of the five canons of professional ethics explains the licensees' need to exercise prudence and caution in order to avoid misrepresentation by acts of commission or omission? 1. Fidelity. 2. Competency. 3. Integrity. 4. Discriminatory practices.
C
Which of the following is a required element of fraud? 1. Opportunity for profit. 2. Breach of warranty. 3. Intention to deceive. 4. False statements about a person.
C
Which of the following steps in developing a company policy on disclosure should come last? 1. Write the company policy.. 2. Review the various agency options.. 3. Train the staff and monitor performance.. 4. Select the agency representations that will be practiced..
C
Which of the following acts by a broker would fall under the list of deceptive practices as defined by the Deceptive Trade Practices Consumer Protection Act? 1. Telling a buyer that the local school is very good. 2. Telling a buyer that a home will be great for young children, when the last owners had no children. 3. Telling a buyer the community is quiet, when it is known for its large holiday celebrations. 4. Telling the buyer that the tiles in the foyer were American made, when they were imports.
D
An enforceable waiver of rights to sue under DTPA would require that 1. the waiver be in writing and signed by the consumer.. 2. the consumer be represented by legal counsel.. 3. the consumer and the defendant be in relatively equal bargaining positions.. 4. all these conditions be met to have an enforceable waiver of rights..
D
An example of breach of warranty under DTPA might be 1. a new-home builder who refuses to repair a defective wall stud discovered by the homeowner two months after moving in.. 2. a new-home builder who fails to repair/replace a dishwasher that floods the basement the night the new residents move in.. 3. the air-conditioning company that refuses to return calls to a homeowner about the defective air-conditioning unit just installed by the company.. 4. all are examples of breach of warranty..
D
Attorney Eric Page received compensation from the sale of the White Ridge Ranch. In which of the following ways would the compensation to Page have been permissible? 1. Paid from the listing agent's commission.. 2. Paid from the seller's agent's commission.. 3. Paid by the listing agent's subagent.. 4. Paid directly by the seller..
D
Broker Jerry has received two offers on one of his listings, each for $87,500. One couple is Hispanic. Which topic would NOT be relevant to address during Jerry's presentation of the two offers to his client? 1. Financial strength of the buyer. 2. Seller's net proceeds from each offer. 3. Repair limit. 4. Ethnicity of each buyer.
D
Consumers are protected under DTPA from 1. false, misleading, and deceptive practices.. 2. unconscionable actions.. 3. breaches in warranty.. 4. all of these actions..
D
In a multiple-offer situation, the broker should do which of the following? 1. Provide the highest offer to the seller and hold the other offers until the seller has made a decision on the highest offer.. 2. Notify the agents of all potential buyers that there are multiple offers and explain the differences between the offers to each agent.. 3. Reject all the offers on behalf of the seller and tell all who made an offer to resubmit their best offer.. 4. Provide the offers to the seller as they come in, unless otherwise directed by the seller..
D
In an intermediary transaction, the broker's objective is to 1. help the client meet his goals.. 2. close the transaction.. 3. represent the interests of the brokerage.. 4. provide advice to both parties..
D
Misrepresentation does NOT always include 1. a false statement.. 2. another's decision to contract.. 3. two parties.. 4. the intention to deceive..
D
Unless licensed as a salesperson or a broker, a personal assistant could NOT 1. place signs.. 2. type sales contracts.. 3. make appointments.. 4. show listings..
D
What is the difference between an appointee in an intermediary brokerage and a subagent for the seller? 1. An appointee is always a sales agent; a subagent is licensed as a broker.. 2. An appointee is made by a written agreement; a subagent can be any other broker other than the listing broker.. 3. An appointee is prohibited from sharing a commission; a subagent always shares in a commission.. 4. An appointee is named by a broker for a particular transaction; a subagent enters a transaction through a relationship with a client or customer..
D
What law empowers the Texas Real Estate Commission (TREC) to create rules and regulations for real estate licensees? 1. Texas Property Code. 2. Texas Deceptive Trade Practices Act. 3. Texas Licensing Act. 4. The Real Estate License Act.
D
Which of the following practices is a violation of the Deceptive Trade Practices Consumer Protection Act (DPTA)? 1. Screening prospective buyers to comply with the sellers wish to sell to women only. 2. Telling a seller that a property should sell from $200,000, when it sells for $180,000. 3. Waiting until a prospective buyer sees a property before telling her about the industrial view from the kitchen. 4. Failing to tell the seller that a broker is receiving commission from the buyer.
D
Which of the following statements is FALSE? 1. A licensed sales agent cannot list property in her own name.. 2. A licensed sales agent cannot sue buyers and sellers directly for unpaid commissions.. 3. A licensed sales agent can be hired as an employee or as an independent contractor.. 4. A licensed sales agent can hold active licenses under multiple brokers at the same time..
D
Broker Amil has a written listing agreement with George that also allows Amil to act as an intermediary and make appointments. Jean, a sales associate sponsored by Amil, has an oral agreement to represent her best friend, Mary, in the purchase of a new home. Jean shows George's property to Mary. Which statement is TRUE? 1. Amil has legally become an intermediary because of the written permission granted by his client, George.. 2. Amil has illegally entered into a dual representation role.. 3. Although Amil is an intermediary, his associate Jean is an undisclosed dual agent.. 4. Amil is an undisclosed dual agent, and his associate is the intermediary..
B
Claudia Smith, a real estate attorney, solved complicated legal problems to make the sale of the Conner's farm. Broker Albert McLin, agent for the sellers, appreciated Smith's work and sent Smith a check after he collected his commission on the sale. Is this commission sharing permissible? 1. Yes, as long as Smith was directly involved in facilitating the transaction.. 2. No, brokers are prohibited from sharing their commissions with attorneys.. 3. Yes, as long as Smith is a licensed attorney.. 4. No, only the buyer's attorney can share a commission with attorneys..
B
Hans, a listing associate with Munchen Realty, is holding an open house at one of his new listings. The next door neighbor, Gretchen, arrives to tour the property along with friends who are relocating from another city. Hans introduces himself and explains that Munchen Realty represents the owner of the property. He does not provide the Information about Brokerage Services form; however, he does provide a general fact sheet about the property and mentions that the property is within FHA-insured loan limits for the area and that mortgage interest rates are the lowest they have been in years. In regard to agency disclosure and the statutory written statement, Hans 1. should also have presented the statutory written statement.. 2. has fully complied with TRELA.. 3. should not have disclosed his agency status because this was an open house.. 4. should have provided the statutory written statement because he did not limit his activities to handing out the fact sheet..
B
Which of the following is NOT an element of agency by ratification? 1. The agent performs an unauthorized act.. 2. The principal denies the agent's authority to act.. 3. The principal learns of the act after it's performed.. 4. The principal benefits from the act..
B
A broker owns a firm with two sponsored sales agents. The broker obtained the original listing and brought in the potential buyer. Which of the following statements BEST describes the broker's authority to act as an intermediary in the transaction? 1. The broker can appoint himself to represent the potential buyers and appoint one of the sales agents to act as the intermediary.. 2. The broker cannot be an intermediary in this case because he brought in both seller and buyer.. 3. The broker should act as the intermediary and appoint each of the sponsored sales agents to the buyer and the seller.. 4. The broker can be an intermediary in this case without appointments and give advice and opinion to both parties because he brought both parties in..
C
Bob the broker recently obtained a listing for a small hotel. A prospect working without a buyer's agent puts an offer on the property with several contingencies through a licensee who works with Bob. That bid is presented to the seller. Another licensee in Bob's office, Brent, has a client who expressed interest in a similar investment. Brent calls the client and urges him to make an offer quickly if he is interested and tells him about the contingencies in the other party's contract. Has Bob's office acted properly? 1. Yes, the first offer has already been presented to the seller, and the seller is free to accept or reject it.. 2. Yes, because Brent has an agency relationship with his client, he can alert him to the contents of the first offer.. 3. No, Brent has provided his client with an unfair competitive advantage through the information he provided.. 4. No, if an unrepresented customer has made a bid through the broker, another member of the firm is prohibited from presenting an offer..
C
Chuck, a sales associate with Lakenheath Realty, drops by one of his vacant listings to turn off the hot tub. As he is leaving, buyer Jacob arrives and introduces himself, mentions that he is represented by broker Lowell at Donegal Realty, and asks to view the property. Before showing the listing to Jacob, TRELA would require Chuck to 1. present Jacob with the written statutory information about brokerage services.. 2. confirm the existence of a written buyer's agreement with Donegal Realty and obtain Lowell's permission to show the listing to Lowell's client.. 3. verbally disclose Chuck's agency relationship with the owner to Jacob.. 4. do all of these actions..
C
George, designated broker for Aberdeen Realty, sponsors Tina's license. She successfully finds a property through the MLS for her best friend Blake. Unfortunately, Tina discovers the day before closing that George has left town on a family emergency. Tina needs her share of the sales commission to make her house and car payment. Although she is unable to contact George and get his written authorization for the closing office to cut her a separate check, TRELA would permit Tina to 1. have Blake pay her directly, then reimburse Blake when she gets her commission check from Aberdeen Realty.. 2. instruct the closing office to make the entire check out in her name and then refund George his portion when he returns.. 3. instruct the closing office to place her share of the commission with the listing broker then ask the listing broker to pay Tina directly.. 4. do none of these things; she must wait for George to return..
D
Nonexclusive seller agency brokers will 1. only represent buyers/tenants.. 2. only represent sellers/landlords.. 3. represent buyers/tenants and sellers/landlords, but only if each agrees to allow intermediary brokerage.. 4. represent buyers/tenants or sellers/landlords, but not in the same transaction..
D
Under TRELA, there are certain exceptions to providing the written information about brokerage services (which has been included in the Information About Brokerage Services form). These exceptions include all of the following EXCEPT 1. when there is no substantive discussion regarding a specific property.. 2. when the meeting occurs after the parties have already formed a contract between them to sell, buy, or lease real property.. 3. when the proposed transaction is for a residential lease for not more than one year and no sale is being considered.. 4. when the buyer or the seller is a child, a spouse, or a parent of the licensee..
D
Which of the following is NOT a growing trend in real estate transactions? 1. Lower consumer expectations. 2. Use of buyer brokerage. 3. Legal protections for consumers. 4. Greater licensee professionalism.
1. Lower consumer expectations
What amount of knowledge of real estate law is expected of real estate agents who are NOT attorneys? 1. Non-attorney agents must spot common problem areas and direct their clients to expert help when the clients require specific advice.. 2. None, agents who are not attorneys should never talk about legal issues.. 3. Non-attorney agents are required to be expert in real estate law to provide reasonable care and diligence to their clients.. 4. The amount of real estate law information or advice that any agent provides to a client is a personal choice based on the client's needs..
1. Non-attorney agents must spot common problem areas and direct their clients to expert help when the clients require specific advice..
What is the name of the form that MOST sellers must use to disclose that a property meets Texas Property Code? 1. Seller's Disclosure of Property Condition. 2. Texas Property Code Inventory. 3. Buyer's Right-to-Know Report. 4. Basic Property System Disclosure.
1. Seller's Disclosure of Property Condition.
Can the buyer in a real estate transaction ever be considered a client? 1. No, only sellers are clients because they work with agents.. 2. Yes, if the buyer has a buyer's agent.. 3. No, TRELA defines "client" as a seller. . 4. Yes, only if the buyer agrees to use the seller's agent..
2. Yes, if the buyer has a buyer's agent.
A seller based her listing price on the comparative market analysis prepared by the broker. A buyer purchased the property at that price. One month later, the seller learned that the broker underpriced the property by using inappropriate comparable properties. Is the agent liable to the seller? 1. Yes, an agent is responsible for using accurate comparisons.. 2. No, because agents do not charge fees for this analysis.. 3. No, a seller had an obligation to know the value of the property.. 4. Yes, an agent has full authority for the listing price. .
1. Yes, an agent is responsible for using accurate comparisons..
Which of the following sellers is required to provide the Seller's Disclosure of Property Condition? 1. A relocation company. 2. A builder of a new home. 3. A trustee or executor of an estate. 4. A lender after it has foreclosed on a property.
1. a relocation company
When is a license holder required to tell an unrepresented party whom the license holder represents? 1. At the first contact. 2. At the first substantive dialogue. 3. Before the contract is executed by both parties.. 4. Before the contract is closed.
1. at the first contact.
Which is NOT noted as a reason for studying agency law? 1. Increased commission fees. 2. Increased complexity of transactions. 3. Increased litigation. 4. Greater consumer expectations.
1. increased commission fees - Fees are not considered under the concept of agency, but rather they are the compensation agreed to between the broker and the consumer to whom the broker has agreed to provide service. ..
A reason to disclose upon the first meeting with buyers that a brokerage only engages in seller agency is to 1. lessen the chance that the buyers will later claim that the brokerage also represents the buyers.. 2. make the buyers feel as though their business is not wanted at that brokerage.. 3. let the buyers know that the agent of the brokerage will be their advocate and will freely share advice and opinions.. 4. help the buyers understand why the brokerage will only apply fair housing laws to the seller..
1. lessen the chance that the buyers will later claim that the brokerage also represents the buyers..
Under an open listing, the broker who earns the commission is the one who 1. produces an accepted contract.. 2. obtained the listing.. 3. shows the property to the buyer.. 4. markets the property..
1. produces and accepted contract..
Additional coverage (endorsements) to title insurance may not be purchased to include the following 1. property damage resulting from fire.. 2. unrecorded liens not known by the policyholder.. 3. homestead rights.. 4. rights of tenants in possession of the property at time of closing..
1. property damage resulting from fire..
TREC is BEST described as an agency that 1. protects consumers.. 2. manages real estate.. 3. settles law suits among licensees.. 4. determines real property tax rates..
1. protects consumers - If TREC receives a complaint about the practice of a licensee who has violated TRELA, it may investigate the complaint and take the appropriate action, which could result in fines and/or suspension or revocation of the license. .
Although a broker may enter into an oral listing agreement, the broker may NOT look to the courts to compel the seller to pay a commission unless the 1. seller signed an agreement to pay a commission to the broker for selling the property.. 2. broker signed the listing agreement.. 3. broker was a member of the Texas Association of REALTORS®, and is therefore authorized to use the TAR listing form.. 4. buyer authorized the broker's commission to be paid through the seller..
1. seller signed an agreement to pay a commission to the broker for selling the property..
Exclusive buyer's brokers do not 1. take listings.. 2. represent buyers.. 3. split commissions.. 4. charge retainer fees..
1. take listings
A licensee is prohibited from performing which of the following for a customer? 1. Discuss different types of mortgages. 2. Handle the customer's money . 3. Show the customer the property. 4. Convey information from the seller.
2. Handle the customer's money. This is a fiduciary duty and a licensee agent cannot be a fiduciary for a customer.
A specific termination date is required in a buyer's representation agreement under which of the following laws or rules? 1. The Rules of the Texas Real Estate Commission. 2. The Texas Real Estate License Act. 3. The Texas Association of REALTORS® Code of Ethics. 4. The Canons of Professional Ethics promulgated by the Texas Real Estate Commission.
2. The Texas Real Estate License Act.
Which of the following should NOT be disclosed by a broker about an owner and a property? 1. The owner's car has been vandalized in the driveway three times this year.. 2. The owner must sell because of personal financial problems.. 3. The property's air conditioner does not work on the second floor.. 4. A portion of the property's garden floods with heavy rains..
2. The owner must sell because of personal financial problems.
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? 1. To impress the customer with the number and types of listings. 2. To avoid a potential conflict of interest if the buyer wants to purchase an in-house listing. 3. To determine whether the customer knows any of the broker's current clients. 4. To learn whether the types of properties the brokerage lists are appealing to the customer.
2. To avoid a potential conflict of interest if the buyer wants to purchase an in-house listing.
Must a buyer's agent disclose his relationship with a buyer to an owner who is selling a property on her own? 1. No. 2. Yes, at first contact. 3. Yes, if the owner asks. 4. Yes, before presenting an offer.
2. Yes, at first contact.
A listing broker must explain to the seller that the seller's full disclosure responsibility includes 1. physical material facts listed on the Seller's Disclosure Notice (formerly the Seller's Disclosure of Property Condition) form.. 2. material facts that may be of importance to the buyer's decision.. 3. physical material facts that may be of importance to the buyer's decision.. 4. material facts listed on the Seller's Disclosure Notice (formerly the Seller's Disclosure of Property Condition report)..
2. material facts that may be of importance to the buyer's decision..
Argyll Realty provides representation services to both buyers and sellers but never acts as an intermediary. Argyll Realty practices 1. exclusive buyer agency.. 2. nonexclusive seller agency.. 3. exclusive seller agency.. 4. exclusive buyer/seller agency..
2. nonexclusive seller agency..
After prolonged negotiations, a seller has accepted the buyer's price offer. The buyer is eager to move ahead, but needs to change the closing date by one week. Can the seller's agent change the closing date without involving the seller? 1. Yes, because the seller has approved the price offer.. 2. Yes, reasonable care allows agents to adjust minor terms.. 3. No, the change cannot be made without the client's approval.. 4. No, once the price has been accepted, other contract terms cannot be changed..
3. No, the change cannot be made without the client's approval..
Which of the following examples BEST explains the concept of treating third parties fairly in a real estate transaction with multiple offers? 1. Telling only the second buyer the price that the first buyer has offered. 2. Telling only the second buyer that the first buyer has made an offer. 3. Telling all buyers to make their best offer. 4. Telling one of the buyers the terms of two other buyers offers.
3. Telling all buyers to make their best offer.
Where in the Texas Administrative Code are the rules pertaining to real estate professionals? 1. Title 18. 2. Title 20. 3. Title 22. 4. Title 24.
3. Title 22 - Title 22 of the Texas Administrative Code (TAC) governs real estate professionals..
Broker Brenda practices nonexclusive seller agency. One of her clients is Conner. Brenda is handling the sale of a lake home Conner inherited from his grandfather. The home is appealing to another of Brenda's clients, George, whom Brenda has been helping to find a lake home. George would like to make an offer on Conner's property. What can Brenda do in this situation? 1. Represent both clients in this transaction. 2. Withdraw from representing Conner, the seller. 3. Withdraw from representing either Conner, George, or both of them in the transaction. 4. Withdraw from representing George, the buyer.
3. Withdraw from representing either Conner, George, or both of them in the transaction.
Title insurance provides the policyholder with 1. guaranteed continued ownership of the property.. 2. unlimited protection against valid liens.. 3. protection against defects in title up to policy limits.. 4. security against future liens and judgments..
3. protection against defects in title up to policy limits..
As an agent of the broker, sales associates generally do NOT 1. give opinions as to the market value of residential properties.. 2. sign listing and buyer agency contracts.. 3. reject offers from prospective buyers that are below the listing price.. 4. sign property management agreements..
3. reject offers from prospective buyers that are below the listing price..
A broker who assumes responsibility for the real estate brokerage activities of a sales agent is called a 1. broker associate.. 2. subagent.. 3. sponsoring broker.. 4. fiduciary..
3. sponsoring broker
Which of the following statements accurately describes how buyers are treated in an in-house sale by a real estate company that offers exclusive seller agency? 1. They are treated as client.. 2. They are treated as clients or customers.. 3. They are treated as customers.. 4. They cannot receive service from the licensees..
3. they are treated as customers
If the seller fails to provide the required seller's disclosure of property condition by the time specified in the contract, the contract is 1. void.. 2. voidable by the seller.. 3. voidable by the buyer.. 4. enforceable, as long as the seller gives oral disclosure..
3. voidable by the buyer..
Nearly every state requires 1. representation of the seller.. 2. representation of the buyer.. 3. written or oral disclosure of agency.. 4. dual agency..
3. written or oral disclosure of agency
What should an agent do if a client requests an unlawful action? 1. Comply only if the action would not harm the agent or the customer. 2. Comply only after asserting that the client alone is liable for the legal implications. 3. Inform the client that the request is illegal and consider the risks. 4. Inform the client that the request is illegal and refuse to comply.
4. Inform the client that the request is illegal and refuse to comply.
Gail used broker Bob as a buyer's agent when she was interested in buying a townhome last year. She gave up that idea when she realized that she would prefer the privacy of a free-standing home. This year, she is interested in making an offer on a home that Bob has listed. Can Bob reveal what he knows about Gail's exemplary credit history to the seller? 1. Yes, no restrictions are placed on the disclosure of favorable customer information.. 2. Yes, the broker must disclose all information about the buyer's financial standing.. 3. No, a broker should not attempt to bias a seller by using financial information.. 4. No, the information was gained through Bob's agency relationship with Gail..
4. No, the information was gained through Bob's agency relationship with Gail..
To a real estate agent, the difference between a client and a customer is best described by which of the following statements? 1. The agent has a duty of fairness to a client and a fiduciary duty to a customer. . 2. The agent has a fiduciary duty to neither the client nor the customer.. 3. The agent has a duty of fairness to both the client and the customer.. 4. The agent has a fiduciary duty to a client and a duty of fairness to a customer..
4. The agent has a fiduciary duty to a client and a duty of fairness to a customer - A licensee works with a customer and for a client.
A real estate licensee must NOT 1. discuss the provisions of the contract with the client.. 2. suggest the client seek competent legal counsel.. 3. explain the meaning of factual or business details.. 4. give legal advice (unless the licensee is also a Texas-licensed attorney)..
4. give legal advice (unless the licensee is also a Texas-licensed attorney)..
A broker owns a firm with one other sales agent. Which of the following statements is TRUE with respect to the broker's ability to engage as an intermediary between a seller and a buyer? 1. The broker may act as an intermediary between a buyer and the seller but cannot make appointments.. 2. The broker may appoint himself to represent the buyer and the sponsored sales agent to represent the seller.. 3. The broker may act as an intermediary for the transaction and appoint the sales agent to represent the buyer and a subagent from the firm across the street to represent the seller.. 4. The broker may not act as an intermediary in this situation..
A
Agency by ratification" does NOT require which of the following? 1. The agent provides written notice describing the nature and results of the act.. 2. The agent performs an unauthorized act.. 3. The principal subsequently learns of the act.. 4. The principal does not repudiate (deny) the agent's authority to act..
A
Brent, a licensee in Bob the broker's office, wants to help his mother-in-law find a townhouse. When Bob obtains the listing on an appropriate property, Brent shows his mother-in-law the property. She wants to make an offer. Is it possible for Brent's mother-in-law to buy this property without causing Brent to violate real estate rules and regulations? 1. Yes, as long as Brent reveals his relationship in writing, and the firm continues to work on behalf of the seller, to whom it owes the standard duties of full disclosure, skill, and care.. 2. Yes, a mother-in-law relationship is not included in the TREC rule on representing family members.. 3. No, it is impossible for Brent to help his mother-in-law with this transaction, because he works for the firm that has an agency relationship with the seller.. 4. No, regardless of Brent's intent, the seller could never receive standard duties of full disclosure, skill, and care if the relative of a licensee enters a transaction with a client of the broker..
A
Broker Fitzroy lists and sells Roni's house while representing Roni as a seller's agent; however, because of his brokerage policy, Fitzroy had to decline Roni's request to represent her in the purchase of another home. Fitzroy's office policy is that of 1. exclusive seller agency.. 2. exclusive buyer agency.. 3. nonexclusive single agency.. 4. intermediary..
A
If a buyer is purchasing a property that will be financed by a Department of Veterans Affairs (VA) loan, 1. a buyer's broker fee cannot be included in the loan amount.. 2. no buyer's broker fee is permitted.. 3. a buyer's broker fee cannot be paid though a commission spit with the listing broker.. 4. the buyer's broker must be compensated by the buyer..
A
Sandy, a real estate broker, is often asked for her opinion about real estate matters when she attends meetings of the Chamber of Commerce, and even when she attends her children's baseball games. What is the BEST advice for Sandy to follow to avoid potential agency issues? 1. Refrain from answering questions from nonclients.. 2. Only answer questions from trusted associates.. 3. Answer fact questions only; do not provide advice.. 4. Answer all questions, but always provide her business contact information..
A
When is a license holder required to tell an unrepresented party whom the license holder represents? 1. At the first contact. 2. At the first substantive dialogue. 3. Before the contract is executed by both parties.. 4. Before the contract is closed.
A
Which of the following acts requires a real estate license? 1. Showing property. 2. Setting appointments to show a house. 3. Placing for sale signs at a property. 4. None of these.
A
Which of the following is NOT a requirement of a broker's comprehensive plan? 1. Establish an office religion. 2. High ethical standards. 3. Comply with Texas law. 4. Focus on serving clients and customers.
A
Which of the following sellers is required to provide the Seller's Disclosure of Property Condition? 1. A relocation company. 2. A builder of a new home. 3. A trustee or executor of an estate. 4. A lender after it has foreclosed on a property.
A
Which of the following situations is NOT a common way in which unintended dual representation occurs? 1. Bob the broker represents the seller and Sarah, also a broker, is the buyer.. 2. Bob, the listing broker, represents both the buyer and the seller.. 3. Bob the broker represents the seller, and one of his associate licensees represents the buyer.. 4. Bob the broker sells his farm to another individual..
A
Which of the following statements BEST describes constructive notice? 1. Knowledge of the agent is imputed to the principal, even if the information is never actually conveyed to the principal.. 2. Knowledge of the agent is not imputed to the principal, even if the information is never actually conveyed to the principal.. 3. An agent must actually tell the principal before notice is effective.. 4. Constructive notice is the same as actual notice..
A
Which of the following statements is TRUE? 1. Only REALTOR® members may use the Intermediary Relationship Notice form created by the Texas Association of REALTORS®.. 2. Any real estate licensee can use the Intermediary Relationship Notice form created by the Texas Association of REALTORS®.. 3. The Intermediary Relationship Notice form was created by the Texas Real Estate Commission.. 4. All licensees are required to use the Intermediary Relationship Notice form created by the Texas Association of REALTORS®..
A
Which written statement(s) must be in at LEAST 10-point type? 1. Statements regarding the roles brokers might take in a transaction. 2. Agency disclosure. 3. Seller's disclosure of property condition. 4. All TREC forms must be in 10-point type.
A
Seller Vincent decided to let the listing agreement he had with broker Bob expire and sell the property himself. Prospective buyers who looked at Vincent's farm twice while Bob had the listing remained interested in the property, and they want to buy the farm from Vincent directly. Does Bob retain any interest in this transaction? 1. No, he no longer holds an agency with the seller.. 2. No, he failed to make the sale while he was agent.. 3. Yes, if the buyer is registered under a protection clause.. 4. Yes, if the seller wants to provide a commission to him..
C
