Texas Real Estate Agency: Chapter 2 Flashcards

Texas Real Estate Agency: Chapter 2 Flashcards

A customer is entitled to all of the following the broker's opinion of value.Universal agencygives a very broad and general scope of power to the agent to act for the principal.ObedienceThe agent has an obligation to follow the lawful instructions of the client.AccountingMoney received by a broker as a result of transactions such as purchase contracts or property management agreements are trust funds and are frequently held by the broker for the benefit of the principal.Special agency occurs whenthe principals give an agent a limited authority to act on their behalf.Full disclosure regarding status of earnest money deposits.The buyer, not the broker, is responsible for depositing the earnest money with an escrow agent on final signing of the contract by all parties.Full disclosure of property value.Disclosure of property value is a very important part of an agent's fidcuciary duty to the client. Real estate agents provide a broker price opinion (BPO) or a comparative market analysis (CMA) to a consumer.Minimum Service RequirementsA party's agent has a fiduciary duty to provide certtain defined minimum services to their client, services that cannot be passed to the other broker in the transaction.Special agencysometimes known as a limited agency, authorizes the agent to perform only those acts permitted by the principal.Full disclosure relating to the property regardless of whether the fact is favorable or unfavorable, i.e. property defects, defects in the title, ... .A listing agent tells a buyer-customer that the seller is under pressure to sell because of a pending divorce and possible foreclosure. Such disclosure is unacceptable because of the fiduciary duty owed the owner.DisclosureA key point related to loyalty is the obligation of the agent to make a full, fair, and timely disclosure to the client of all known facts relevant or material to the transaction.A salesperson owes all of the following fiduciary duties

EXCEPT

prepare a power of attorney for the buyer.Full disclosure of contract provisions.Before executing any document that is intended to be legally binding the licensee is obligated to discuss the provisions of the contract with the client.Sally, as an agent for the seller, listed and subsequently sold George's town house. She did not tell George that a major zoning change in progress would allow business use in the area, thus increasing property values. Which statement is TRUE?Sally was required to disclose the change because it was a material and pertinent fact.

Full disclosure of buyer's financial condition. The seller's agent must disclose to the seller all information, good or bad, regarding the buyer's financial condition.An example of a general agency relationship would be one that exists between the sales associates and the broker.Full dislcosure of other offersUnless instructed otherwise by the Seller, the listing agent should continue to present all offers until the transaction is closed.LoyaltyAgents must always act in the best interest of their clients and must be loyal to the trust placed in them.General agencyis more restricted than in universal agency. The agent is authorized to conduct an ongoing series of transactions for the principals and can obligate them to certain types of contractual agreements.Which is NOT a fiduciary obligation owed to a client?Inspection Fiduciariesare held to the highest amount of good faith, are required to exclude all selfish interest, are prohibited from putting themselves in positions where personal interest and representative interest will conflict. The most important obligations a fiduciary owes to a principal can be

remembered by using the "OLD CAR" memory device: (1)

obedience, (2) loyalty, (3) disclosure, (4) confidentiality, (5) accounting, and (6) reasonable care and diligence.Full disclosure of informationBecause the licensee's relationship with the client is that of a fiduciary, licensees must always place the interest of the client above that of their own interest.A material fact is one thata reasonable person might feel is important.Full disclosure of commission split.The listing agent must disclose to the seller the existence of any fee-sharing arrangement with a cooperating broker.ConfidentialityThe duty of loyalty requires that the agent keep confidential any discussions, facts, or information about the principal that should not be revealed to others.Reasonable care and diligenceReal estate agents are held to a standard of care that requires, among other things, that they be knowledgeable concerning the land, the title, and the physical characteristics of the property being sold.Brokers can buy a property listed with them under which of the following conditions?Only if full disclosure is made to the seller of the broker's involvement as a purchaser.Which statement is TRUE of listing agents? They must present every written offer to the seller.Full disclosure of relationshipThe real estate agent must disclose to client any special relationship that might exist between the broker and any of the broker's associates and the other parties in the transaction.