Kaplan - Texas Law of Agency Flashcards

Kaplan - Texas Law of Agency Flashcards A net listing is agreeable if the seller gets the desired price for the property False.Net listings may present some legal and ethical problems, especially when transacting with an inexperienced seller.An exclusive buyer-agent may encounter a conflict of interest if two buyer-clients want to make offers on the same property.TrueFalse True Which of the following is TRUE regarding surveys?A) Surveys are not required when obtaining a loanB) Surveys are required only when there is no financing in a real estate transactionC) Surveys are required when showing the location of new improvementsD) Surveys are required in all real estate transactions C A real estate agent must obey all instructions from a principal (client( False A specific termination date is required in a buyer's representation agreement under which act / rule?The Texas Real Estate License Act Which of the following is a TRUE statement regarding provision of the IABS Notice at an open house?A) A license holder is never required to provide the IABS notice at an open houseB) A license holder is required to provide the IABS notice at an open house if a person is represented by another license holderC) A license holder is required to provide the IABS Notice at an open house if there is substantive dialogue about another propertyD) A license holder is always required to provide the IABS Notice at an open house

• A license holder is required to provide the IABS Notice

at an open house if there is substantive dialogue about another property Buyer's agents are held to a higher standard of performance than if they were acting as a seller's subagent or the seller's listing agent.TrueFalse True In which of the following situations might a license holder representing a buyer use a registration agreement?A) When the buyer already knows which property the buyers wants to make an offer onB) When the agent wants to identify a particular property that the agent brought to the buyer's attention while the agent represented the buyer.C) When the buyer wants to purchase an FSBOD) When the buyer has been represented in the recent past by another license holder.

• When the buyer wants to purchase an FSBO

When must a license holder disclose that the license holder represents another party?At the first contact with a party to the transaction.

Which of the following is an example of termination of agency by operation of law?A) Rescission by the partiesB) Agent's breach of duty to the principalC) Death of the agent or the principalD) Revocation by the principal

• Death of the agent or the principalTermination of agency

by operation of law can occur due to death of the agent or client, incapacity, supervening law, bankruptcy, or loss or destruction of the property Seller Mark insisted on having an open listing for his home.As a result, he can continue to seek potential buyers on his own andA) avoid paying a commissionB) benefit from professional screening of prospectsC) maximize marketing opportunitiesD) bypass making property disclosures

A) avoid paying a commissionNote: brokers are less likely

to spend large sums on marketing for an open listing The nonexclusive seller agency broker is likely to have conflicts concerning representation issues.False.Nonexclusive seller agency brokers provide client-level services to only party to a transaction, thus minimizing the conflict of interest concerns that frequently arise in an intermediary situation.If the written Seller's Disclosure Notice is not given by the effective date of the contract, the buyer may...Terminate the contract within seven days after receiving the notice A law enacted by the legislature isstatutory lawCommon law is law that has evolved by custom or court decisions (case law) and is contrasted with statutory law, which is enacted by legislatures John represents Sam in a listing agreement to sell Sam's house. Sam tells john that his child died of AIDs in the house in 1993. Which of the following statements is TRUE regarding John's duty to disclose?A) John may only disclose the death if Sam's child was female / maleB) John may not disclose the death to potential buyersC) John may disclose the death if Sam consents to the disclosure

• John may not disclose the death

Once parties have signed an offer to purchase a property, it

becomes an enforceable contract once:A) value is

exchangedB) all parties have signed the offerC) all parties have signed the offer and all parties have received noticeD) all parties have signed the offer and value is exchanged

• all parties have signed the offer and all parties have

received noticeNotifying the agent is considered notifying the principal per constructive / imputed notice Which of the following topics is NOT required to be included in a brokerage firm's policy and procedure manual according to TREC Rule Section 525.2?A) Conducting an open houseB) Confirming that sales agents maintain their licenses on active statusC) How sales agents are advised of the sales agent's scope of authorityD) Ensuring that sales agents comply with TREC advertising rules

• Conducting an open house

The Texas Real Estate License Act (TRELA) is the law that establishes the duties of real estate license holders with the public True Does the IABS Notice disclose to a buyer that the sales agent represents the seller?No, the notice is information only; it does not disclose who represents who What is mortgagee title insurance?A) Title coverage for the buyerB) Title coverage for the sellerC) Title coverage for the lenderD) Title insurance for the broker

• Title coverage for the lender

A license holder who represents a party in a real estate transaction must disclose that representation in writing to another party in the transaction.False.Dan is Jim's real estate agent under a listing agreement.Dan owes certain duties to Jim. Which of the following does not address the duties that Dan owes to Jim?A) TRELAB) TREC rulesC) The TREC promulgated contractD) The listing agreement

• The TREC promulgated contractBoth TRELA and TREC

rules set out some of the duties owed to clients, and listing agreement specifically addresses things such as marketing, advertising, and other responsibilities.Why might a broker practicing exclusive seller agency treat a buyer as a customer?A) To establish an intermediary and make an appointmentB) To take advantage of earning an undivided commissionC) To maintain an agency relationship with a sellerD) To balance a transaction in which the buyer is unrepresented To take advantage of earning an undivided commission.If the buyer does not require representation, the broker can earn undivided commission.Brent, a license holder in Bob the broker's office, wants to help his mother in law find a town house. Is it possible for Brent's mother in law to buy a property listed with the brokerage without causing Brent to violate real estate rules and regulations?Yes, as long as Brent reveals his relationship in writing, and the firm obtains the consent of both parties to act as an intermediary with appointments.Broker Irma is a one-person brokerage office. If in an authorized intermediary relationship, she could...Act as the intermediary but not make appointments.A customer can expect fair treatment and informed opinions False.A customer can expect fair treatment, but informed opinions are provided only to clients (principals) In a transaction involving "appointed associates," the broker is in compliance as long as he/ she notifies the parties that the broker is going to make appointments.False.The actual appointments may be made orally, but the notification identifying the appointees must be made in writing and given to the buyer and seller.The law requires both written consent to intermediary agency and written notice of the actual appointments.Appointed license holders may give their respective principals services similar to those given when acting as a single agent.TrueFalse TrueHowever, an appointed license holder is still prohibited from disclosing (without written consent) that the buyer would offer more, that the seller would accept less, or any other confidential information.Agency can be created by an oral agreement between the agent and the principal, but a broker should establish a

written contract to:A) register the agreement in courtB)

protect the interests of both partiesC) establish consent and controlD) make the agreement legal

• protect the interests of both parties

What happens if a broker becomes ill and cannot continue to represent the seller during the term of a listing?the listing is terminated A home warranty company must be cerified and registered through the National Association of REALTORS in order to offer their programs in Texas FalseResidential service companies offering home warranties in Texas must be registered through the Texas Department of Licensing and Regulation Which of the following statements is true?A) Only REALTOR members may use the Intermediary Relationship Notice form created by TARB) Any license

holder can use the Intermediary Relationship Notice form created by TARC) The Intermediary Relationship Notice was created by TRECD) All license holders are required to use the Intermediary Relationship Notice by TAR A Under the concept of nonexclusive seller agency, the broker may not conduct an in-house transaction.False.The nonexclusive broker would just have to represent the buyer as a customer.