Law of Agency Actual Questions and Correct Answers
Q1
The fiduciary relationship that arises when one person (a principal) manifests assent to another
person (an agent) that the agent shall act on the principal's behalf and subject to the principal's
control, and the agent manifests or otherwise consents so to act, is called A common law
relationship An agency relationship A customer relationship An arm's length transaction
Answer: B. An agency relationship
Q2
A seller listed her home with XYZ brokerage. A buyer went to ABC Realty and the broker agreed
to help her find a home. The buyer's broker found the XYZ listing in the MLS and showed it to
the buyer who wrote an offer. The MLS offered compensation to both buyers agents and sub
agents. Which is a TRUE statement? The ABC broker does not represent the buyer The XYZ
broker must be an intermediary The ABC broker must be the subagent of the seller The ABC
broker must be the agent of the buyer
Answer: D. The ABC broker must be the agent of the buyer
Q3
"No real estate license holder shall inquire about, respond to, or facilitate inquiries about, or
make a disclosure of any owner, previous or current occupant, potential purchaser, lessor, or
potential lessee of real property which indicates or is intended to indicate any preference,
limitation, or discrimination based on the following: 1) race; 2) color; 3) religion 4) sex; 5)
national origin; 6) ancestry; 7)familial status; 8) disability." This statement is a part of 22 TAC
531: Canons of Professional Ethics and Conduct, which is found in the Real Estate License Act
Truth in Lending Act (TILA) TREC Rules Texas Statute of Frauds
Answer: C. TREC Rules
,Q4
A broker has 15 sales agents in her firm. Sales agent 1 procures an exclusive right to sell listing
agreement from a seller. What is the agency relationship of the parties? The broker is the only
agent of the seller, the seller is the principal/client of the broker; and all 15 sales agents are
agents for the broker only and have no agency relationship to the seller The broker is the agent
of the seller; the seller is the principal/client of the broker; sales agent 1 is an agent to broker
and, by way of the broker, is an agent for the seller; and the other 14 sales agents are agents
for the broker and, by way of the broker, are also agents for the seller. Sales agent 1 is the only
agent of the seller;the other 14 sales agents have no agency relationship with the seller; the
broker will conduct himself as an advisor to sales agent 1 only; and the seller is a
principal/client of sales
Answer: B. The broker is the agent of the seller; the seller is the principal/client of the
broker; sales agent 1 is an agent to broker and, by way of the broker, is an agent for
the seller; and the other 14 sales agents are agents for the broker and, by way of the
broker, are also agents for the seller.
Q5
An agent would NOT owe fiduciary duties to a A. Principal B. Client C. Customer D. Sponsoring
broker
Answer: C. Customer
Q6
An agent owes fiduciary duties to Principal Client Sponsoring broker All of these
Answer: D. All of these
Q7
A sales agent sold a property to an unrepresentative buyer in a cooperative sale. Which
statement is TRUE? The sales agent is a subagent of the seller's broker The sales agent
represents her broker, who is a subagent of the seller's broker This is a cooperative sale and no
subagency exists. The sales agent would only be a subagent if she sold one of her broker's
listings
Answer: B. The sales agent represents her broker, who is a subagent of the seller's
broker
Q8
One who has accepted a delegation of authority to act for and on behalf of another is a(n) A.
Principal B. Client C. Facilitator D. Agent
Answer: D. Agent
, Q9
A real estate broker hired by the buyer to locate a property must obey all of the following
EXCEPT A. The instructions of the buyer B. The agency law C. State licensing law D. The
instructions of the seller
Answer: D. The instructions of the seller
Q10
Which statement is TRUE when a broker is representing the parties in an intermediary
transaction? Neither the broker nor the appointed associates may give the parties advice and
opinions The appointed associates of the broker may give the parties advice and opinions The
seller's appointed associates must tell the buyer if the seller said she would accept less that the
offered price. The buyer's appointed associates must tell the buyer if the seller said he would
accept less that the offered price
Answer: B. The appointed associates of the broker may give the parties advice and
opinions
Q11
A seller's agent is permitted by law to Make a secret profit in addition to the commission
Present an offer from the agent's parents with full disclosure of the relationship Agree to a
counter offer without the buyer's approval Accept a bonus from the seller without the buyer's
approval
Answer: B. Present an offer from the agent's parents with full disclosure of the
relationship
Q12
Mutual agreement to terminate a written agency agreement May be done orally Must include
consideration paid to the broker Must be in writing Must include a waiver of the clients rights
under DTPA.
Answer: C. Must be in writing
Q13
An agency relationship with a buyer may be created by Directly by any licensed sales agent An
express written agreement only Implication, an express written agreement, or an express oral
agreement Showing property to a buyer
Answer: C. Implication, an express written agreement, or an express oral agreement
Q1
The fiduciary relationship that arises when one person (a principal) manifests assent to another
person (an agent) that the agent shall act on the principal's behalf and subject to the principal's
control, and the agent manifests or otherwise consents so to act, is called A common law
relationship An agency relationship A customer relationship An arm's length transaction
Answer: B. An agency relationship
Q2
A seller listed her home with XYZ brokerage. A buyer went to ABC Realty and the broker agreed
to help her find a home. The buyer's broker found the XYZ listing in the MLS and showed it to
the buyer who wrote an offer. The MLS offered compensation to both buyers agents and sub
agents. Which is a TRUE statement? The ABC broker does not represent the buyer The XYZ
broker must be an intermediary The ABC broker must be the subagent of the seller The ABC
broker must be the agent of the buyer
Answer: D. The ABC broker must be the agent of the buyer
Q3
"No real estate license holder shall inquire about, respond to, or facilitate inquiries about, or
make a disclosure of any owner, previous or current occupant, potential purchaser, lessor, or
potential lessee of real property which indicates or is intended to indicate any preference,
limitation, or discrimination based on the following: 1) race; 2) color; 3) religion 4) sex; 5)
national origin; 6) ancestry; 7)familial status; 8) disability." This statement is a part of 22 TAC
531: Canons of Professional Ethics and Conduct, which is found in the Real Estate License Act
Truth in Lending Act (TILA) TREC Rules Texas Statute of Frauds
Answer: C. TREC Rules
,Q4
A broker has 15 sales agents in her firm. Sales agent 1 procures an exclusive right to sell listing
agreement from a seller. What is the agency relationship of the parties? The broker is the only
agent of the seller, the seller is the principal/client of the broker; and all 15 sales agents are
agents for the broker only and have no agency relationship to the seller The broker is the agent
of the seller; the seller is the principal/client of the broker; sales agent 1 is an agent to broker
and, by way of the broker, is an agent for the seller; and the other 14 sales agents are agents
for the broker and, by way of the broker, are also agents for the seller. Sales agent 1 is the only
agent of the seller;the other 14 sales agents have no agency relationship with the seller; the
broker will conduct himself as an advisor to sales agent 1 only; and the seller is a
principal/client of sales
Answer: B. The broker is the agent of the seller; the seller is the principal/client of the
broker; sales agent 1 is an agent to broker and, by way of the broker, is an agent for
the seller; and the other 14 sales agents are agents for the broker and, by way of the
broker, are also agents for the seller.
Q5
An agent would NOT owe fiduciary duties to a A. Principal B. Client C. Customer D. Sponsoring
broker
Answer: C. Customer
Q6
An agent owes fiduciary duties to Principal Client Sponsoring broker All of these
Answer: D. All of these
Q7
A sales agent sold a property to an unrepresentative buyer in a cooperative sale. Which
statement is TRUE? The sales agent is a subagent of the seller's broker The sales agent
represents her broker, who is a subagent of the seller's broker This is a cooperative sale and no
subagency exists. The sales agent would only be a subagent if she sold one of her broker's
listings
Answer: B. The sales agent represents her broker, who is a subagent of the seller's
broker
Q8
One who has accepted a delegation of authority to act for and on behalf of another is a(n) A.
Principal B. Client C. Facilitator D. Agent
Answer: D. Agent
, Q9
A real estate broker hired by the buyer to locate a property must obey all of the following
EXCEPT A. The instructions of the buyer B. The agency law C. State licensing law D. The
instructions of the seller
Answer: D. The instructions of the seller
Q10
Which statement is TRUE when a broker is representing the parties in an intermediary
transaction? Neither the broker nor the appointed associates may give the parties advice and
opinions The appointed associates of the broker may give the parties advice and opinions The
seller's appointed associates must tell the buyer if the seller said she would accept less that the
offered price. The buyer's appointed associates must tell the buyer if the seller said he would
accept less that the offered price
Answer: B. The appointed associates of the broker may give the parties advice and
opinions
Q11
A seller's agent is permitted by law to Make a secret profit in addition to the commission
Present an offer from the agent's parents with full disclosure of the relationship Agree to a
counter offer without the buyer's approval Accept a bonus from the seller without the buyer's
approval
Answer: B. Present an offer from the agent's parents with full disclosure of the
relationship
Q12
Mutual agreement to terminate a written agency agreement May be done orally Must include
consideration paid to the broker Must be in writing Must include a waiver of the clients rights
under DTPA.
Answer: C. Must be in writing
Q13
An agency relationship with a buyer may be created by Directly by any licensed sales agent An
express written agreement only Implication, an express written agreement, or an express oral
agreement Showing property to a buyer
Answer: C. Implication, an express written agreement, or an express oral agreement
