Austin institute Real Estate Final Flashcards

Austin institute Real Estate Final Flashcards What are the Canons of Professional Ethics and Conduct for brokers and salesmen?a. competency, integrity, fidelityb. trust, honesty, faithc. revernce, business, friendlyd. fiduciary, principal, knowledge

• competency, integrity, fidelityThe licensee owes his

client competency, integrity, and fidelity. Fidelity is considered the most important. It is relationship of trust between the broker and his client.

Texas does not have a disclosure law. This means:a. A

deed is not used.b. The name of the new owner is not allowed to be his deed.c. The buyer does not have to disclose to the public the amount that was paid for the property.d. The deed is never recorded at the county clerk's office.

• The buyer does not have to disclose to the public the

amount that was paid for the property.Some states require the price the property sold for to be disclosed to the public.Texas does not have this law.All of the following would be cause to suspend or revoke a license being held by a broker or salesperson under the

Real Estate License Act EXCEPT:a. knowingly making a

substantial misrepresentationb. acting in the dual capacity of a broker and undisclosed principal in any transactionc.failing to specify in a listing contract a definite termination date which is not subject to prior noticed. revealing to an owner an offer which your knowledge and experience convince you to be well below "fair market value"

• revealing to an owner an offer which your knowledge

and experience convince you to be well below "fair market value"Answers "A", "B", and "C" are all listed in the license act as reasons the real estate license could be revoked.Answer "D" is the correct answer. A license is required to give the client advice and opinions, and your knowledge and experience would be an example of advice and opinions."The whole system or set of rules made by the government

of a town, state, or country" is the definition of:a. Real

Estateb. Moralc. Ethicsd. Law

• LawEthics is rules of behavior based on ideas about

what is good and bad. Moral is based on what you think is right and good.Failure on the part of the agent to advise the purchaser of real property in writing that he should have the abstract covering the property examined by an attorney of his own selection, or that he should be furnished with a policy of

title insurance shall:a. be a violation of the Consumer

Protection Actb. subject the agent to a fine of not less than $100 or more than $500c. preclude purchaser from occupancy until title is insuredd. preclude payment of, or recovery of, any commission agreed to be paid on the sale

• preclude payment of, or recovery of, any commission

agreed to be paid on the saleA real estate licensee is instructed by the TRELA to advise a buyer to obtain an abstract or title insurance policy. If the licensee does not do this he cannot collect a commission and his licensee may be revoked.The Code of Ethics requires the buyer's agent to disclose

to the seller's agent that they represent the buyer at the:a.

first contract.b. first face to face mettingc. first substantive dialogued. first formal meeting

• first contract.Broker's must always disclose to each other

who they represent in the transaction. This must be done at the first contact between the two brokers.In order to become a broker the salesperson must have experience points. The number of experience points required isa. 270b. 3600c. 4d. 300

• 3600A salesperson must have an active license for four

of the previous five years. The salesperson receives the points for doing real estate transactions. The salesperson must acquire points in each year of the four years.An applicant for a broker or salesperson has ______ to satisfy the requirements after they file the application.a. 6

monthsb. 1 yearc. 90 daysd. 6 weeks

• 1 year

What is the status of a contract if the seller does not make the buyer aware of a property being located within a municipal utility district?a. voidable by the buyerb. voidc.voidable by the sellerd. voidable by the buyer or the seller

• voidable by the buyerThe buyer can cancel the contract

or the buyer can continue with the contract. A municipal utility district is also called a MUD. The Texas Water Code requires the seller give the buyer notice relating to the tax rate and bond indebtedness of the district before execution of the contract The TAR Residential Buyer/Tenant Representation Agreement states that the broker will seek payment of commission first from the seller, landlord, or their agents. If such persons refuse or fail to pay, the broker will be paid by

the:a. Buyer customerb. Tenant customerc. Clientd. None

of the above

• ClientThe broker will be paid by the buyer client if the

broker cannot collect a commission from the seller, landlord, or their agents Proration of items in a real estate closing is made usually

as of the date of:a. recording the deedb. the mortgage

paymentc. buyer's walkthroughd. closing

• closingIn Texas the seller is responsible for the day of

closing unless stated otherwise.A person appointed by a court to settle the estate of a deceased person when the executor cannot perform or

refuses to perform is:a. another executorb. a legateec. an

administratord. a devisee

• an administrator

Information About Brokerage Services must always be printed in _______ point type.a. 8b. 10c. 12d. 14

• 10The Texas Real Estate Licensing Act states that the

Information About Brokerage Services form must always be in at least 10 point type.When the broker is aware of the agency relationship and has disclosed the relationship to all parties to the

transaction, it is:a. intentional dual representationb.

unintended dual representationc. universal agencyd.special representation

• intentional dual representationImplied agency can result

in unintended dual representation. When a listing agent shows his own listings to an unrepresented buyer, the agent should make sure the buyer understands whom the agent represents.A Competitive Market Analysis (CMA) is most often

prepared by a/an:a. inspectorb. lenderc. real estate agentd.

appraiser

• real estate agentA real estate agent is allowed to do a

Competitive Market Analysis (CMA). Only an appraiser can do an appraisal.According to the Information About Brokerage Services, a broker may act as a buyer's agent, a seller's agent, a subagent, or an intermediary.a. Trueb. False

• TrueThe information on the Information About Brokerage

Services form is from the TRELA. The Information About Brokerage Services is used to inform the public about the ways the public can work with an agent.Extravagant statements that a reasonable person would

recognize as exaggeration is:a. puffingb. fraudc.

comminglingd. boycotting

• puffingPuffing is making something sound better than it

is.Brokers often act as an intermediary and are involved in

extensive negotiations between an owner and a tenant in:a.

commercial leasingb. apartment locatingc. selling homesd.listing homes

• commercial leasing

Commissions are paid to the salespersons and the broker

associates by the:a. other salespersonsb. other brokersc.

clients and customersd. sponsoring broker

• sponsoring brokerA broker may pay other brokers and

his sponsored agents. A salesperson may not pay anyone.

The Texas Property Code requires the seller of a dwelling of not more than one unit deliver a Seller's Disclosure Notice to a buyer if the dwelling is a resale property. If the buyer has not received the notice before signing the

contract, the buyer may:a. terminate the contract within 7

days after receiving the notice.b. terminate the contract within 14 days after receiving the noticec. terminate the contract, but must have the sellers permissiond. reduce the sales price even if the seller does not agree.

• terminate the contract within 7 days after receiving the

notice.If the buyer has not received the Seller's Disclosure Notice when the contract is signed he may request the seller deliver the notice. The buyer may terminate the contract for any reason within 7 days after the buyer receives the notice and the earnest money will be refunded to the buyer.

A broker earns his commission when:a. a ready, willing,

and able buyer has entered into a contract.b. a prospect makes a below listing price offer for the propertyc. the seller withdraws the property from the marketd. the broker advertises the property.

• a ready, willing, and able buyer has entered into a

contract.You/your spouse live in community property sale. Which of the following would be considered separate property?a. the boat your spouse owned before the marriageb. a duplex given to you by your parents after the marriagec. stocks your spouse received as a gift after marriaged. all would be separate property

• all would be separate property

When working with the buyer as a customer, the broker

may:a. Show property to the buyerb. Fill out an offer for the

buyerc. Collect a commission for the transactiond. All of the above

• All of the aboveThe broker may not give advice and

opinions to the buyer customer.A broker is not allowed to commingle funds. Commingle

means to:a. Spent the client's moneyb. Receive a

commission from a customerc. Place the client's money in the broker's accountd. Pay the client a rebate

• Place the client's money in the broker's accountAn agent

may have his license suspended because he commingles funds.All parties to the transaction must be treated honestly and fairly, but only the client is owed a fiduciary relationship.a.Trueb. False

• TrueA fiduciary relationship is a relationship of trust. The

broker must always put the client's interest above the broker's interest.A contract by which the owner agrees with another person that he shall have the right to buy the property at a fixed

price, within a certain period of time is called:a. an escrow

sales contractb. a sale and leasebackc. a "time is of the essence" provisiond. an option

• an optionThe buyer has the right (not the obligation) to

buy, but the seller is obligated to sell. The buyer must pay consideration to the seller in order for the contract to be enforceable. This is usually a small amount of money.When the buyer is represented as a client, a fiduciary duty

is owed to the:a. buyerb. sellerc. agentd. buyer and seller

• buyerThe broker always owes a fiduciary duty to the

client

A person is required to have a real estate license if:a. They

are a public official in the conduct of official dutiesb. They are employed by a new home builder and are only selling his homesc. they are an on-site manager of an apartment complexd. they are selling a ranch for a person from another country

• they are selling a ranch for a person from another

countryThe public official, the employee of a new home builder, and the on-site manager of an apartment complex are not required to have a real estate license when they are doing real estate transactions for their employer.