law of agency – Flashcards
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As an agent of the broker, sales associates may generally do all of the following except
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reject offers from prospective buyers which are below the listing price.
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Texas law specifically exempts sellers and real estate agents from a duty to disclose information relating to sex offenders. A. True B. False
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Selected Answer: True
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A fiduciary must always act in the best interest of the customer. True False
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Selected Answer: False
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All of the following were noted as reasons for studying Agency except Selected Answer:
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increased commission fees.
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The client has a legal right to expect advocacy. A. True B. False
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Selected Answer: True
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The Texas Real Estate Commission (TREC)
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Selected Answer: consists of six broker members and three public members.
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There is a judicial trend toward the tradition of caveat emptor. A. True B. False
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false
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Nearly every state requires
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Selected Answer: written or oral disclosure of agency.
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The Texas Board of Insurance regulates title insurance companies in Texas. A. True B. False
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Selected Answer: True
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The relationship between a broker and a sales associate is usually one of
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Selected Answer: general agency.
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Duties to third parties by the licensee do not include
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Selected Answer: treating them equally.
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In order to provide reasonable care and diligence to a client, a licensee must
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have a basic knowledge of real estate law.
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A buyer contracts to purchase a property from a seller for $87,000. Two weeks before closing, a buyer's agent for another company delivers an offer for $86,000. The listing associate should
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present the offer to the seller as a potential back-up offer for further negotiation.
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Which of the following is not a fiduciary obligation owed to a client?
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Selected Answer: Inspection
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All of the following were noted as reasons for studying Agency except
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Selected Answer: increased commission fees.
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The client has a legal right to expect advocacy. A. True B. False
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Selected Answer: True
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The Texas Real Estate Commission (TREC) Selected Answer:
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consists of six broker members and three public members.
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There is a judicial trend toward the tradition of caveat emptor. A. True B. False
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Selected Answer: False
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Nearly every state requires Selected Answer:
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written or oral disclosure of agency.
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The Texas Board of Insurance regulates title insurance companies in Texas. A. True B. False
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Selected Answer: True
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The relationship between a broker and a sales associate is usually one of
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Selected Answer: general agency.
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A buyer comes into the offices of Master Realty with a clipping from Sunday's paper indicating a property listed for sale by another broker in town. The ad mentions that the property is across the street from the main city route bus stop. The buyer indicates he is particularly interested in this property because his wife is bound to a wheelchair and needs to be close to that particular bus stop. As a sales associate for Master Realty, Amid accepts the listing broker's offer of subagency, shows the property, and writes up a full-price offer. While waiting for a response from the listing broker, Amid happens to read that the city may cancel the bus route. Which of the following is true?
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Amid has an ethical responsibility to reveal the route change to the buyer-customer since that feature was material to the buyer's offer.
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Advantages of exclusive seller agency include all of the following except
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100 percent loyalty and confidentiality for the buyer.
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The written listing agreement between the broker and the seller creates
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Selected Answer: express agency.
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Which of the following relationships with the buyer should a subagent disclose to the seller of a large lot zoned for commercial use?
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Selected Answer: All of the above.
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Which of the following factual comments to the buyer by the appointed licensee would be permitted without the written permission of the seller in a fully authorized intermediary relationship with appointments?
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Selected Answer: "You could ask the seller to pay most of your closing costs."
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Broker Irma is a one-person brokerage office. If in an authorized intermediary relationship she could
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act as the intermediary but not make appointments.
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A subagent would have to disclose all of the following facts about the buyer to the seller except
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Selected Answer: the buyer's son is severely handicapped.
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John Byers is a buyer-client of Global Realty engaged in negotiation for the purchase of 123 Main Street, a property listed by another broker. He has offered $172,000 but is willing to go as high as $195,000. If Global Realty also represents a different buyer who recently and unsuccessfully negotiated with the seller, Global Realty should
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Selected Answer: obtain the consent of the other buyer-client to reveal the outcome of the previous negotiations to John Byers
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A seller's agent is an advocate of the seller.
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Selected Answer: True
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The fee to be paid to a buyer's broker by a buyer-client is determined by agreement between
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Selected Answer: buyer's broker and the buyer.
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Su Casa Realty has an office policy of collecting a non-refundable retainer fee from each buyer-client. They also expect to be paid by the seller. Which of the following is true? Selected Answe
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Su Casa Realty must disclose the retainer fee to the seller and obtain permission from all parties to collect both fees.
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Although clients receive full representation in nonexclusive single agency, clients may have to switch to customer status if an agency conflict arises or the broker may have to withdraw from the transaction altogether.
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Selected Answer: True
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A broker practicing nonexclusive single agency who found herself negotiating a transaction between a current client and a former client may do all of the following except
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reveal to the current client any relevant information learned from the former client during the previous agency relationship.
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Broker Fitzroy lists and sells Roni's house while representing Roni as a seller's agent but due to his brokerage policy, Broker Fitzroy had to decline Roni's request to represent her in the purchase of another home. Broker Fitzroy's office policy is that of
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Selected Answer: exclusive seller agency
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Although it does not matter whether the broker's fees are paid by the buyer or the seller, if the agency relationship is unclear, a court will likely consider who paid the fee to be an important factor in determining who is the agent's principal.
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Selected Answer: True
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The listing broker provided a written disclosure statement from his seller showing that the property was connected to the city water and sewer facilities. The listing broker lives on the same block as his seller and knows that most of the properties on that block have yet to be connected to the city facilities but does nothing to challenge his client's disclosure. The buyers are represented by a buyer's agent and discover the misrepresentation shortly after occupying the property. Liability probably rests with
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Selected Answer: the seller and the seller's broker.
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Broker Fitzroy of Dunoon Realty is the listing broker for Seller Roni's property. One of Broker Fitzroy's sales associates is providing customer-level service to Buyer Barnie. Which of the following comments by the sales associate to Buyer Barnie might place Broker Fitzroy in an undisclosed dual agency relationship?
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Selected Answer: All of the above
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The type of listing that gives the broker the greatest amount of security is the
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Selected Answer: exclusive right-to-sell listing.
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In Texas, earnest money
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Selected Answer: is meant to provide a nonjudicial remedy for damages.
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A broker does not have to withhold social security and income taxes from wages of a sales associate treated as an employee as long as the associate signs an affidavit affirming that the associate will take personal responsibility for paying his or her own taxes.
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Selected Answer: False
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The information regarding the roles brokers may play in a transaction may be written or oral, but the disclosure of agency status must be written.
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Selected Answer: False
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Once an intermediary transaction with appointments begins, the written notification need only include the names of the parties, not the appointees.
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Selected Answer: False
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It is illegal in Texas for a broker to represent a seller or buyer on the basis of a verbal agreement.
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Selected Answer: False
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A broker licensed in Texas could pay a referral fee to a broker licensed in Hawaii as long as the Hawaiian broker does not try to participate in the Texas transaction.
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Selected Answer: True
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In Texas, brokers are required to carry worker's compensation coverage for independent contractors as well as employees.
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Selected Answer: False
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Jesse Longoria is the broker/owner of West Texas Realty. As the responsible broker, he may also be referred to as
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Selected Answer: all of the above.
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Once the broker has written permission to act as an intermediary on behalf of the buyer and seller, no further notification is required when an intermediary transaction begins unless the broker makes appointments.
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Selected Answer: True
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Under TRELA, it would not be considered paying a fee to a non-licensee if Broker Clarece asked the closing office to use some of her brokerage fee to pay her buyer-client's closing costs.
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Selected Answer: True
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TRELA holds the principal broker responsible for the acts of associated broker licensees.
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Selected Answer: True
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Brokers may not incorporate the statutory information regarding brokerage services within a company brochure.
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Selected Answer: False
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A non-licensed personal assistant could do all of the following for the sales associate except
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Selected Answer: show listings.
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The relationship between a broker and licensees associated with the broker is
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Selected Answer: A and C
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Which of the following is essential to create an agency relationship?
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c. Consent and Control
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The TREC-approved form "Information About Brokerage Services" meets the statutory requirement only for residential sales, not for tenant/landlord services.
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Selected Answer: False
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Presentation of the statutory written statement regarding the roles brokers might take in a transaction would be sufficient to also meet the specific requirement for disclosure of agency status.
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Selected Answer: False
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Under TRELA, a broker may appoint more than one licensee associated with the broker to each client in an intermediary transaction.
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Selected Answer: True
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Once the broker has written permission to act as an intermediary on behalf of the buyer and seller, no further notification is required when an intermediary transaction begins unless the broker makes appointments.
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Selected Answer: True
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Some noted advantages to the broker of nonexclusive single agency include all of the following except Selected Answer:
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permits continued representation of both clients on in-house sales.
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The fiduciary duties demand that a real estate broker, acting as an intermediary in a transaction, must place
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Selected Answer: his personal interest below those of his two clients.
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A Buyer's Representation Agreement creates an agency relationship to represent the buyer in a transaction.
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Selected Answer: True
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Broker Fitzroy lists and sells Roni's house while representing Roni as a seller's agent but due to his brokerage policy, Broker Fitzroy had to decline Roni's request to represent her in the purchase of another home. Broker Fitzroy's office policy is that of
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Selected Answer: exclusive seller agency.
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Agency is a consensual relationship that requires both consent by the agent and a delegation of authority by the principal or client.
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Selected Answer: True
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Lena is a broker associated with Yokohama Realty. She holds which of the following licenses?
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Selected Answer: brokers license
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For a broker to bring suit against a consumer to recover compensation, TRELA requires the broker show proof that
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Selected Answer: all of the above.
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Wade wishes to transfer his license from Loch Long Realty to Isle of Skye Realty where he feels he can get more experience in property management and commercial sales. Since he has 17 residential listings with Loch Long, all properties belonging to his close friends and relatives, Wade's listings will automatically transfer with him to Isle of Skye Realty.
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Selected Answer: False
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Presentation of the statutory written statement regarding the roles brokers might take in a transaction would be sufficient to also meet the specific requirement for disclosure of agency status.
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Selected Answer: False
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Debbie is the designated broker for Shetland Realty. She councils Jenny, a sales associate, that Jenny must stop wearing mini skirts 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
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Selected Answer: independent contractor status.
