Unit 3: Exam Flashcards

Unit 3: Exam Flashcards

Indicate whether the following state is true or false and

why: A broker owes the same duties to a third party buyer

as they owe to a client seller under a listing agreement.A)True. Sellers and buyers must be treated equally and fairly.B)False. A broker has fiduciary duties to a client and duties of honesty and fairness to a third party buyer.C)False. A broker owes fiduciary duties to clients and limited fiduciary duties to third party buyers.D)True. Sellers and buyers must both be given advice and opinion.b A listing broker must explain to the seller that the seller's full disclosure responsibility includesA)material facts that may be of importance to the buyer's decision.B)material facts listed on the Seller's Disclosure Notice.C)physical material facts that may be of importance to the buyer's decision.D)physical material facts listed on the Seller's Disclosure Notice.A The listing associate, Betty Principi, gives the seller the Seller's Disclosure Notice. The seller says there is really nothing to disclose, and because he broke his writing hand playing golf, he asks Betty to fill out and sign the form for him. Which statement isTRUE?A)Because she is acting under special agency, Betty has authority to fill out the form and sign on behalf of her client.B)To avoid liability, Betty should limit her activity to marking the boxes under the direction of the seller, but instruct the seller to have a friend or other family member sign on his behalf.C)Although Betty may explain each section of the form, she should neither mark the boxes nor sign on the seller's behalf.D)Because Betty is only an agent of her broker, only her broker may fill out and sign on behalf of the client.c Which of the following isNOTa third party to a listing agreement?A)An inspectorB)A buyerC)A brokerD)A lender c Which of the following is theMOSTcommon complaint of buyers against real estate agents?A)MisrepresentationB)Breach of fiduciary dutyC)MisappropriationD)Negligence a The responsibility of a property abstractor is toA)judge the quality of the property's title.B)obtain court approval of the abstract.C)include and record all pertinent data in the abstract.D)indemnify the title holder for defects in the title.c

Additional coverage (endorsements) to title insurance mayNOTbe purchased to includeA)property damage resulting from fire.B)homestead rights.C)unrecorded liens not known by the policyholder.D)rights of tenants in possession of the property at time of closing.a What are license holders in Texas responsible for telling buyers regarding quality of title?A)License holders must make certain that buyers purchase title insurance.B)License holders must advise buyers to obtain either an attorney's opinion of title, based on an abstract, or a policy of title insurance.C)License holders should not talk with buyers regarding title because this is a legal issue.D)License holders are responsible for recommending attorneys and title insurance companies to buyers and making certain that they receive title protection.B Chandra's home. Ralph, a buyer interested in purchasing the home, asks Bonita what's the lowest price Chandra will take. Chandra told Bonita during the listing negotiations that she was willing to take as low as $10,000 less than the listing price. How must Bonita respond to Ralph's question?A)Bonita must treat Chandra and Ralph fairly, which means that she should tell Ralph to ask Chandra what price he would take.B)Bonita must be honest with Ralph and tell him that Chandra will take $10,000 less than the listing price.C)Since Bonita cannot lie about what Chandra told her, she should terminate the listing with Chandra.D)Bonita must not disclose that Chandra will take less than the listing price unless Chandra has authorized the disclosure.d 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 isTRUEregarding John's duty to disclose the death?A)John may only disclose the death if Sam's child was female.B)John may disclose the death if Sam consents to the disclosure.C)John may only disclose the death if Sam's child was male.D)John may not disclose the death to potential buyers.d With respect to mortgagee title insurance, which of the following is aTRUEstatement?A)Coverage decreases as the loan balance decreases.B)Coverage remains constant.C)The amount of coverage is for the original sales price.D)Coverage increases as the loan balance decreases.a

With respect to mortgagee title insurance, which of the following is aTRUEstatement?A)Coverage remains constant.B)Coverage decreases as the loan balance decreases.C)The amount of coverage is for the original sales price.D)Coverage increases as the loan balance decreases.B Gloria is the listing broker in a listing agreement between herself and Richard, the seller. Buyer Timothy is interested in purchasing Richard's property. Who is the third party to the listing agreement?A)Buyer Timothy is the third party.B)Gloria is the third party.C)Richard is the third party.D)There is no third party.A Which type of death on the property would a seller have to disclose?A)The suicide of a close relativeB)A friend visiting the owner trips over the cat, falls into the pool and drownsC)A friend visiting the owner slips and falls on the pool tileD)The owner suffers a heart attack c Standard title insurance coverage in Texas doesNOTincludeA)lack of access to and from land.B)incorrect marital statements.C)forged documents.D)issues related to bankruptcy.D What does Texas law require of enforcement officials regarding publication of sex offender information?A)That they disclose such information only on a need-to-know basisB)That they maintain such information as confidentialC)That they publish information regarding the offender in a local newspapersD)That they disclose such information to all new homeowners.C What is the duty of a license holder regarding the disclosure of the fact that an occupant of the property died of AIDS?A)The Real Estate License Act authorizes a license holder to disclose the information.B)A license holder must disclose the information as required by Section 5.008 of the Property Code.C)The Canons of Professional Ethics and Conduct prohibit its disclosure.D)A license holder has complete discretion to disclose the information.c While acting as a subagent, Harry shows a property to a customer and becomes aware that the current owner suffers from AIDS. Two weeks later, Harry is now acting as an agent of a prospective buyer who also happens to be Harry's cousin. Harry mayA)reveal the information because he is no longer in an agency relationship with the seller.B)reveal the information because of his close relationship with the buyer.C)not reveal the information.D)reveal the information with the consent of the

owner.c How should a real estate license holder explain to buyers the value of having a licensed property inspector complete an inspection on a subject property?A)Property inspections by licensed inspectors are likely to reveal hidden material defects that can be used in further negotiations with the seller.B)An inspector is not necessary because of the provision of the Seller's Disclosure of Property Condition.C)Licensed property inspectors provide