real estate agency QUIZ
A broker and a seller created an agreement orally. The seller agreed to pay a 6% commission. Two days later, the broker presented a written listing agreement to the seller, and the seller insisted on changing the commission to 4% before he signed it. How much will the commission be at closing?
4%
A listing broker and seller agree to a 5% commission on the sale of a $500,000 house. The listing broker agrees to evenly split the commission with the buyer's broker. How much will the buyer's sales agent earn if their brokerage split is: broker 40 / agent 60?
7,500 (500,000x.05x.5x.60)
An intermediary might also be referred to as:
A broker representing both parties in a transaction
Depending on the business at hand, what kind of employment agreement might exist between a broker and a principal?
A listing agreement, a buyer/tenant representation agreement, or a property management agreement
Broker David is holding an open house at his client-seller's home while the seller is out of town. He gets there early and sees that the cat has peed on the carpets. He hires an emergency cleaner and charges it to the seller. When the seller returns, he is glad David acted and pays the bill.This is:
Agency by ratification
Which one of these scenarios depicts a sales agent violating the duty of loyalty?
Agent Brad was showing his clients home to a potential buyer. He gave the buyer advice about making an offer
Alexis, a sales agent, is advising her client on how to fill out the Seller's Disclosure Notice. The client does not want to disclose that the house has water damage. What should Alexis do?
Alexis should remind the client that they must fill our the form honestly. If the client won't change their mind, she should end their relationship.
Which of these actions violates the Fair Housing Act?
An agent tells a women with a baby that the building she's interested in renting an an apartment in is child-free
Broker Emilio has been found guilty of fraud. He is liable for all of the following EXCEPT:
Automatic donation to the Texas legal fund
A broker's offer policy manual is there to protect:
Brokerage, clients, and sponsored agents
Which of the following statements is TRUE?
Brokers are responsible for everything their sponsored agents do in regard to real estate
Sales Agent Buffy signs a listing agreement with Seller Willow. Who is responsible and beholden for Buffy's actions?
Buffys broker
Alan is a sales agent. He has a general agency relationship with his supervising broker, Barbara. His client, Cara, is the seller. Darius is an interested buyer that Alan is giving a home tour to. To which of these people does Alan owe the duties of OLD CAR?
Cara
Agent Clark is working with seller Jean to sell her property. Agent Clark used to go to college with Buyer agent Sally. Clark and Sally meet up for lunch one day, and Clark tells Sally his seller is willing to accept less than the listed price. What is TRUE of this situation?
Clark has violated his duty of loyalty and confidentiality to his clients
To whom do sales agents owe the OLD CAR fiduciary duties?
Clients
Lora, a license holder, represented Jess, a seller seeking to sell his home. Lora showed the home to several prospective buyers. After some time, Lora and Jess accepted Sara's offer for his house. Sara's agent, Pat, negotiated on Sara's behalf. Sara is Lora's:
Customer
License holders owe the duties of honest and fairness to:
Customers and clients
What is the primary consumer protection law in Texas?
DTPA
Completion of the Notice of Intermediary is needed in which of the following examples?
Delores is representing a buyer who is going to make an offer on a property listed by another agent in her office
Which of the following services could be provided for a buyer, whether a client or a customer?
Disclose material defects about the property
If a supervising broker requires agents to be at the office certain for hours and attend all company meetings, the agents should most likely be classified as:
Employees
What is the main difference between compensation for an agent employee and an agent working as an independent contractor?
Employees are paid either a salary plus commission. IC are paid only by commission
Frida is about to sign a listing agreement on her house. You are her agent. You should do all of the following EXCEPT:
Encourage Frida to allow you to represent buyers, as well
Broker Stefan knows that the roof of a house is a damaged, but does not disclose this to the buyer. What act has Stefan engaged in?
Fraud
George's buyer client has decided to make an offer on a property that is listed by George's brokerage firm. George's broker's agency policy says he will become an intermediary representative with an appointment to help the buyer. What further action must George take before proceeding?
George must ensure he has written authorization from both buyer and seller to enter an intermediary relationship
George's buyer client has decided to make an offer on a property that is listed by George's brokerage firm. George's broker's agency policy says he will become an intermediary representative with an appointment to help the buyer. What further action must George take before proceeding?
George must ensure he has written authorization from both the buyer and seller to enter an intermediary relationship
Marc is selling his house. You are his broker. What are the five stages of helping Marc sell his house?
Getting the listing, marketing the house, accepting offers, the escrow period, closing day
Which duties — known as the non-fiduciary duties — does every sales agent owe everyone in a transaction?
Honesty and fairness
Which of the following provides the BEST explanation for why disclosure of material facts is required?
If known, it could cause the buyer or seller to take a different course of action
All of the following are true about the Seller's Disclosure Notice EXCEPT:
If the form is never provided, the buyer may terminate the contract at any time up to seven days before closing and the earnest money will be returned
Ashley is house-hunting and finds a home she likes being sold by the owner. Now that Ashley is interested, neither she nor the owner knows what to do next. Ashley asks her friend Bill, a real estate agent. He advises her and helps her with documents for no fee. What type of relationship has formed?
Implied agency
Lester's buyer-client has just signed an offer. Lester should:
In writing tell the buyer to get abstract of title examined by the buyers attorney
All of following are agency acts EXCEPT
Inspecting
Meg is a license holder. She completes a form that was prepared by an attorney licensed in Texas, and that was approved by the attorney for the type of transaction her client is engaging in. Evaluate Meg's behavior.
It is legal for meg to complete this form
All of the following are true about the Texas Deceptive Trade Practices Act (DTPA) EXCEPT:
It relies upon the idea of caveat emptor
All of the following is true about implied agency EXCEPT:
It was when a principal explicitly instructs the broker/agent to act on their behalf
Your client asks you, "What kind of neighborhood is this?" Pick the best answer.
It's a mile away from the elementary school, and half a mile away from a beautiful park.
The Real Estate License Act has two separate disclosure requirements. What are they?
License holders must disclose representation of agency upon first contact, and they must provide the IABS notice upon "substantive" Discussion
Buyer Bill buys a home without the broker with whom he is contracted (Broker Matt). Matt decides to pursue payment of commission. For Matt to sue for collection of commission, all of the conditions must be met EXCEPT:
Matt must not be an independent contractor
Broker José and his client, Alice, agree that they want their agency relationship to end. What is this called?
Mutual rescession
The protected classes under the Fair Housing Act are race, color, religion, sex, familial status, disability, and:
National origin
Which of these is TRUE regarding net listings?
Net listings may only be used when required by a knowledgeable client
Asa, a sales agent, knows that her client, Emma, has HIV. To whom should Asa disclose Emma's HIV status?
No one
A buyer told an agent orally that if the agent help her find a home, she would pay 7% commission. They looked at new homes, for-sale-by-owner homes, and homes from the MLS. The buyer bought a home. Then she refused to pay the agent, saying the agent did not do enough. Can the agent sue?
No, agents cannot sue for commission without a written signed promise to pay them
Jane is starting a new job in another state and needs to sell her current home. Consequently, Jane is anxious to sell, and is willing to go quite a bit below the listing price. Is it appropriate for the listing agent to disclose this information to potential buyers?
No, recuasse it is confidential information
If a broker is in an intermediary transaction with appointments, is it permitted for the buyer's appointee to tell the seller that the buyer will go up on their offer price?
No, that is considered confidential information
Is the information the seller's agent advertised in the MLS enough information for the buyer's agent to give the buyer before they commit to buying a certain property?
No, there are many other things a buyer needs to know before being locked into a property
Mikayla, an agent, advises a client about the validity of a title. Can she do this?
No, this is unauthorized practice of law
Nila represents Ed as he sells his house. After the sale, Nila and Ed learn from the buyer that there is mold in one of the bathrooms. The mold was in a hidden spot that was not obvious in prior inspections. Can Nila and Ed be held responsible for this?
No. The seller can only be held responsible for what they know
Seller Carmen tells Sales Agent Greg that she wants $250 in earnest money from the buyer. Greg agrees, and tells her that it's up to her. What fiduciary duty does this interaction illustrate?
Obedience
What would NOT be included in a listing agreement between a seller and broker?
Preferred ethnicity of any potential buyer
It is the duty of the agent to:
Put a clients interest above their own
According to TREC's Canons of Professional Ethics and Conduct, what categories are protected from discrimination?
Race, color, religion, sex, national origin, ancestry, familial status, and disability
Rory is a sales agent. What must be true?
Rory must be sponsored by a licensed broker
Uh-oh! You think you may have committed a license violation. Where can you find a list of actions that are grounds for suspension or the revocation of your license?
Section 1101.652 of TRELA
Shelly is a license holder. She shows a listing to Emma, who is interested in buying a home. The listing is owned by Francine, a broker. Shelly is not affiliated with Francine, and she does not represent Emma. Shelly is Francine's:
Subagent
Jill commits a license violation, and her license is suspended. Who suspends it?
TREC
Broker Sally placed an advertisement that made a reader think that the property was being sold by the owner, not listed by an agent. How might TREC respond?
TREC would discipline sally
Of the below, what is an unlicensed real estate assistant NOT allowed to do?
Telemarketing and other solicitation work
Your friend Lisa calls you up and complains about the service she is getting from her listing agent. "I just can't sell my house!" she wails. She asks if you can start looking around for possible buyers, just as a friendly favor. What should you do?
Tell Lisa that you cannot help her while she is under contract with another broker
Broker Nick no longer represents client Josephine. What is Nick allowed to disclose about Josephine's house, now that he no longer represents her?
That Josephines house is located in the Brooks oaks neighborhood and is 10 years old
All of the below are true of exclusive buyer agency EXCEPT:
The buyer is free to work with other agents as they please
Broker Cameron gives his client a notice which informs them of his minimum duties, the types of license holders, and how a license holder can represent a party in a real estate transaction. What is this notice called?
The information about brokerage service form
A key difference between an agent working as an employee and one working as an independent contractor is:
The level of control the broker has over the agents actions
According to IRS guidelines, which of the following does not fit the description of an independent contractor?
The license holder has their schedule set but the supervising broker, who has rules on when the license holder must be at the office
With her seller-client, Broker Melanie discusses compensation (commission), permission to list on the MLS, scheduling of house showings, and expected marketing efforts. What document are they going over?
The listing agreement
Mary had a listing with a gentleman who recently passed away. What is the status of Mary's listing?
The listing is terminated by operation of law
Broker Luke agreed to take an Exclusive Agency Agreement with a seller. Two weeks weeks after Broker Luke entered the property into the MLS and started advertising, the seller sold the property. What is TRUE?
The seller maintained the right to sell and does not need to pay the broker a commission
Which of the following is NOT true about brokerage office policy manual for agents?
They should be optional reading for members of a brokerage.
In an intermediary transaction, the consequences to the seller and buyer are all of the following EXCEPT:
They will have to take the transaction out of the house
Which kind of agent has the broadest authority?
Universal agent
Sales Agent Aurora has a client selling his home. The potential buyer is not working with a broker. Aurora is helping the buyer obtain financing. Is this ethical? Why or why not?
Yes because the seller getting financing furthers her clients best interest
A real estate brokerage advertises that they will list property for a low commission. Later, the seller finds out that he advertised low commission is contingent upon the seller signing a 12-month listing and agreeing to do all of the showings themselves. Is the brokerage guilty of a violation?
Yes they are guilty of misrepresentation
Bernard wants to file a claim against his former broker under the DTPA. The alleged violation happened on June 5, 2015 (which is the same day Bernard found out about the alleged violation). He intends to file the claim on April 3, 2017. Can he file a claim?
Yes, Bernard is within the statue of limitation for filing claim under DTPA
Frank is handling a lot of foreclosed properties for a bank. He frequently gets bids for having work done to the properties. Since Frank is sending these vendors a lot of business, he asks them to give him a 15% referral fee off the top of their invoices when paid. Is Frank violating any laws?
Yes, He is in violation of TRELA
Broker Phil is acting as an intermediary in a transaction. He knows that the owner will accept $10,000 less than the asking price if he has to. Can Phil tell the buyer?
Yes, Phil can disclose this information to the buyer, but only if the owner has authorized him in writing to do so
Ali shows a house that Mary is trying to sell on her own. Ali is not Mary's agent, but Mary sees what's happening and does nothing to stop it. Leslie falls for Ali's pitch and buys the house. Eventually, Leslie sues Mary and Ali because the roof is damaged. Does she have a legal claim against Mary
Yes, because of agency by estoppel
Ali shows a house that Mary is trying to sell on her own. Ali is not Mary's agent, but Mary sees what's happening and does nothing to stop it. Leslie falls for Ali's pitch and buys the house. Eventually, Leslie sues Mary and Ali because the roof is damaged. Does she have a legal claim against Mary?
Yes, because of agency by estoppel
As an agent, can you accept a rebate on an expenditure made for a principal?
Yes, but only if you clients knows about such deals and consents to them
A report prepared for a seller-client looks at comparable properties that have sold in the last six months and what they sold for, listings that failed to sell and their prices, and how many homes are for sale in the area now and many months of inventory that represents. What is this report?
a comparative marketing analysis
Agency can be terminated by:
a principal firing their agent, destruction of the property, and abandonment by the broker
When Texas buyers, sellers, landlords, and tenants seek the professional services of Texas license holders to represent their interests in real estate transactions, they are seeking a(n) ______ relationship with those Texas license holders.
agency
According to the IRS, sales agents can be considered independent contractors if:
agent has a license, earnings are based on sales (not hours) and taxes are not withheld from earnings
All of the below are examples of limited dual representation EXCEPT:
broker alicia gives full fiduciary duties to both the buyer and the seller
All of the below are a type of agency relationship EXCEPT:
client
What is one way that a listing agent can exercise their duty of honesty to a buyer non-client?
disclosing known problems with the property
All of the following are license violations EXCEPT
failure to commingle money that belongs to another person with license holders own money
Confidentiality is a __________ duty.
fiduciary
Mel, a sales agent, represents his broker Belle in his relationships with clients. As such, Mel helps Belle fulfill her fiduciary duties to her clients. Mel is a(n) ________ of Belle.
general agent
Frank is a broker. What duties does he owe to a home inspector who is inspecting a house on behalf of his client?
honesty, fairness, and full disclosure of the condition of the property
Broker Carinna talks to a buyer about a specific property. The dialogue they have could be described as substantive. What is one thing Carinna is required to do as a result?
provide the buyer with the IABS notice
What does a general agency relationship give a sales agent the power to do?
signs a listing agreement on behalf of the broker
Broker Bitsy is getting ready for a listing appointment with a seller. What four forms should she bring with her to the appointment?
the IABS from, a brokers agency disclosure form, a sellers disclosure notice, and a listing agreement
Mary had a listing with a gentleman who recently passed away. What is the status of Mary's listing?
the listing is terminated by operation of law
Which of the following MUST an agent disclose to a potential buyer of a house?
the murder of a middle aged women which occurred on the property
All of the following statements are true EXCEPT
there is no commission agreement in the buyer representation agreement
Why are agency disclosure laws important?
they disclose who works for them and what each kind agent does
TREC's primary goals include all of the following EXCEPT:
to assist license holders with daily operation of their business
Agent Susan is representing a buyer who lives out of the country. The buyer finds the perfect property, but can't make it to the closing. The buyer authorizes Susan to sign all of the necessary documents on her behalf. What type of agency is this a representation of?
universal agency
A broker uses the word "broker" in an advertisement. Is this in compliance with current advertising rules?
yes, ads can use the word broker, but are not required to