Texas Law of Agency - Chp. 1 Agency Concepts

Associate Broker

- A licensed real estate broker who chooses to work under the name and supervision of another licensed broker.

Associate Licensee

- A licensee who is licensed under a broker, or who has entered into a written contract with the broker to act as the broker's agent in a real estate transaction.

Fiduciary

- A person in a position of trust and confidence, as between principal and broker; broker as a fiduciary owes certain loyalty which cannot be breached under the rules of agency.

Real Estate Broker

- A person or an organization acting as the agent for others in negotiating the purchase and sale of real property or other commodities for a fee.

Real Estate Salesperson

- A person performing any of the acts included in the definition of real estate broker but while associated with and supervised by a broker.

Common Law

- Law that is derived from court decision. The body of law that grew from custom and practices developed and used in England "Since the memory of man runneth not to the contract".

Statutory Law

- Law that is set down by a body of legislation or by a singular legislator.

Agent

- One who acts for and with authority from another called the principal.

Client

- Prior to signing a listing agreement, a party in a real estate transaction who will employ an agent

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.

Principal

- The employer of an agent; one of the main parties in a real estate transaction, such as a buyer, borrower, seller, or lessor.

Customer

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

Agency

- The relationship between 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.

The Texas Real Estate Commission was created in what year...? 1949 1963 1988 2001

1949

Which of the following receives advice, or an opinion, from a real estate broker...? A principal A customer A neutral third party All of the above

A principal

Which of the following can legally employ a real estate salesperson to work on their behalf...? AA real estate broker BA real estate associate CAnother real estate salesperson DAn associate broker

AA real estate broker

If an individual works as an associate broker, who must they work under...? AA sponsoring broker BA real estate salesperson CAn associate licensee DAn associate broker does not work under anyone

AA sponsoring broker

The party the agent brings to the principal as a seller or buyer of the property is known as a/an...? ACustomer BClient CPartner DAssociate

ACustomer

Statutory law is derived from which of the following...? ALegislation BCourt decisions CJudge rulings DCommon actions

ALegislation

Agency between a broker and principal is created through a/an...? AListing contract BIndependent contractor agreement CPurchase contract DAny of the above

AListing contract

What issues arose when the broker, in effect, appointed the listing agent to the seller and told the buyer that he would represent her interests rather than the seller's interest? AThe broker violated his fiduciary duties to both clients. BThe broker violated the intermediary laws set forth by TRELA. CThe broker violated ethical and possibly legal rules and regulations. DAll of the above.

AThe broker violated his fiduciary duties to both clients. BThe broker violated the intermediary laws set forth by TRELA. CThe broker violated ethical and possibly legal rules and regulations. DAll of the above.

In this hypothetical, is it permissible for a listing associate to negotiate the sale of her own listing to a buyer whom she also represents through her broker? ANo. The listing associate may never negotiate any sale for their own listing. BNo. The listing associate may not negotiate because one of the parties would have been at a disadvantage. CYes. The listing associate may negotiate any sale with anyone they wish to get the property sold. DYes. The listing associate may negotiate any sale so long as there are two brokers involved.

BNo. The listing associate may not negotiate because one of the parties would have been at a disadvantage.

In this hypothetical, how should the process of making appointments be handled? AThe broker did the right thing in this case and appointed one associate to the seller and he represented the other party. BThe broker should have appointed two associates and stayed out of the mix. CThe broker did everything right, except that he should of stayed in contact with the buyer. DNone of the above are correct.

BThe broker should have appointed two associates and stayed out of the mix.

A law that is made by a judge's decision in a court case is known as...? Statutory law Real estate law Common law Civil law

Common law

The real estate broker is responsible for ordering the appraisal for a transaction...? T (True) F (False)

F (False)

Ely is a real estate broker who represents that seller in a transaction. Ely owes which of the following to the seller...? Intermediary duties Common duties Fiduciary duties All of the above

Fiduciary duties

Real estate agents operate as a/an ................to their sponsoring broker? Partner Independent contractor Client Employer

Independent contractor

A broker who represents both the buyer and seller in the same transaction operates as a/an...? Intermediary Partner Associate Exclusive broker

Intermediary

The party that the listing contract is with is referred to as the...? Principal Partner Associate Subordinate

Principal

Which of the following can serve as a principal...? Seller Buyer Lessor All of the above

Seller Buyer Lessor All of the above

A law that is written by a legislating body is known as...? Statutory law Real estate law Common law Civil law

Statutory law

A real estate broker owes fiduciary duties to his/her principal...? T (True) F (False)

T (True)

Which of the following is responsible for enforcing TRELA...? NAR TAR TREC Texas Attorney General

TREC (Texas Real Estate Commission)

The acronym TRELA stands for which of the following...? Texas Real Estate License Association Texas Real Estate License Act Texas Real Estate Legal Act Texas Real Estate Legislation Act

Texas Real Estate License Act

The rules and regulations regarding real estate licenses in Texas are described in which of the following...? Texas Real Estate License Act Texas Real Estate Law Texas Bureau of Real Estate Article 12-A of the State Real Estate Law

Texas Real Estate License Act

Which of the following orders the appraisal for a transaction...? The broker The lender The agent The seller

The lender