CHAMPIONS REAL ESTATE EXAM LAW OF AGENCY /
NEWEST CHAMPIONS REAL ESTATE LAW OF AGENCY
ACTUAL TEST QUESTIONS AND WELL ELABORATED
ANSWERS (100% CORRECT VERIFIED ANSWERS) NEW
UPDATED VERSION |GUARANTEED PASS A+. (FULL
REVISED EXAM)
This person hires an agent - ANSWER: The Principal
The agent works on behalf of this person - ANSWER: the client (principal)
This type of agency allows for the greatest range of authority - ANSWER: Universal
This is provided to the agent when there is written documentation that the agency
relationship exists. - ANSWER: Express authority
This is the most limited of all the agency relationships - ANSWER: Special agency
This type of agency is created when a 3rd party believes that an agent has authority
that has NOT been granted by a principal - ANSWER: Agency by Estoppel
This type of agency is created when actions lead another person to assume that one
is an agent (Example- you have a key to neighbors home and show the property) -
ANSWER: Ostensible Agency
If a buyer hasn't signed a buyer's rep agreement, then who is representing the
buyer? - ANSWER: No one
This establishes a relationship with a broker - ANSWER: The Buyer/Tenant
Representation agreement
This can be written or oral - ANSWER: Disclosure of Representation
These are required to place their own selfish interests behind that of their clients. -
ANSWER: Fiduciaries
A licensee isn't required to provide the IABS when... - ANSWER: the licensee meets
with a party that is already represented
A broker is obligated to treat who honestly? - ANSWER: client, customer, and agents
Broker must have written consent to act as... - ANSWER: an intermediary
IABS form is the property of... - ANSWER: TREC
,Broker Bob is the broker/owner of ABC Realty. Agent Bill at ABC Realty is a listing
agent. Agent Sue, also at ABC Realty, is working with a buyer who is being
represented by the firm. Agent Sue's buyer wants to purchase Agent Bill's listing
In the above transaction, Broker Bob will: - ANSWER: Remain neutral and refrain
from providing advice and opinion to either party
The IABS should contain - ANSWER: How the broker will be compensated
Broker Steve, having no agents, is a solo practitioner. He has a client buyer that
wants to purchase one of his listings. The process that Broker Steve must use is: -
ANSWER: Intermediary without appointments
A fiduciary relationship is based on - ANSWER: trust
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who
wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not
enter into an
agency relationship with City Realty.
In the above transaction, who is representing the buyer? - ANSWER: No body
because the buyer is a customer.
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who
wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not
enter into an
agency relationship with City Realty.
In the above transaction, who is City Realty representing? - ANSWER: The seller,
because City Realty is a subagent of ABC Realty in this transaction
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who
wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not
enter into an
agency relationship with City Realty.
What type of transaction is this? - ANSWER: cooperative (co-op)
An exemption to using the Information About Brokerage Services form is: - ANSWER:
a lease for less than 1 year with no sale anticipated
A licensee not associated with the client's broker but who is representing the client
through a
cooperative agreement with the client's broker is known as: - ANSWER: Subagent
,This must be in at least 10 point type, must have the exact language prescribed in
the License Act
and must be provided to a buyer or seller at the first substantive discussion of a real
estate
transaction - ANSWER: IABS (Information About Brokerage Services)
Jeffrey wants to see property that your company has listed; he does not want to be
represented.
The agent must: - ANSWER: give Jeffrey the IABS form
A licensee must present the Information About Brokerage Services form: - ANSWER:
at the first substantive discussion of a real estate transaction
A licensee has a listing with a seller and has a buyer's representation agreement
signed with a
buyer who desires to purchase this agent's listing. How is the agent operating? -
ANSWER: as a non-appointed associate in an Intermediary relationship
TREC was established in: - ANSWER: 1949
Which of the following is the real estate licensing authority in Texas? - ANSWER:
TREC
A termination date in a listing agreement must be: - ANSWER: definite
Which of the following is NOT an agent's duty to a client? - ANSWER: Trust
These are the duties: OLDCAR: Obedience, loyalty, disclosure, confidentiality,
accounting, reasonable care
The duty of ___________ means that an agent must follow all of the lawful
instructions of
the client. - ANSWER: obedience
Jerome is a licensed agent who desires to sell his mother's home. Jerome has the
property
listed with his brokerage firm and finds a buyer himself to buy mom's home. Jerome
should: - ANSWER: Disclose to the buyer in writing that the seller is his mother.
If an agent sells their own property, acting as a principal, the agent must: - ANSWER:
disclose to the party in writing that they are a licensed agent
Confidential information between client and agent should be: - ANSWER: kept
confidential forever
In most states other than Texas, the most common method of dealing with in-house
transactions between client buyers and sellers is: - ANSWER: dual agency
, When handling escrow funds for clients, the License Act requires that funds be
deposited in
a "reasonable time". A reasonable time is defined as: - ANSWER: 2 business days
The listing agreement should contain: - ANSWER: the legal description of the
property
Which of the following are elements of a listing? - ANSWER: the terms of sale, such
as the sales price and financing terms acceptable to the seller.
Sam listed his property with three different real estate brokers. In each agreement
he reserved
the right to sell the property himself without paying a commission. The type of listing
that
Sam signed with each broker was an: - ANSWER: open listing
Data used for a CMA should be no older than: - ANSWER: 6 months
The report used to give a seller or buyer an indication of market value is called: -
ANSWER: Comparative Market Analysis
Listings may be terminated by: - ANSWER: death, either party - broker or client, or
mutual agreement
Listings are the property of the: - ANSWER: broker
Duties of principal to agent - ANSWER: CRIP: Compensation, Reimbursement,
Indemnification (protect the agent from suffering a loss due to the
agent's reliance in information received from the principal), Performance
If a broker dies what happens to the listing with the seller? - ANSWER: it
automatically terminates
If a broker sells a property on behalf of a seller without a signed listing agreement,
the courts
will most likely declare that the broker is: - ANSWER: a volunteer, an agent in a listing
agreement that is unenforceable against the seller, and unable to enforce payment
of the commission
Commission rates are set by? - ANSWER: client and broker
The TAR® Buyer Representation Agreement in our textbook: - ANSWER: authorizes
Intermediary, is limited to the market area designated in the agreement and
authorizes the agent to show properties to competing buyers
If a broker's agents are independent contractors, there can be a policies and
procedures manual
NEWEST CHAMPIONS REAL ESTATE LAW OF AGENCY
ACTUAL TEST QUESTIONS AND WELL ELABORATED
ANSWERS (100% CORRECT VERIFIED ANSWERS) NEW
UPDATED VERSION |GUARANTEED PASS A+. (FULL
REVISED EXAM)
This person hires an agent - ANSWER: The Principal
The agent works on behalf of this person - ANSWER: the client (principal)
This type of agency allows for the greatest range of authority - ANSWER: Universal
This is provided to the agent when there is written documentation that the agency
relationship exists. - ANSWER: Express authority
This is the most limited of all the agency relationships - ANSWER: Special agency
This type of agency is created when a 3rd party believes that an agent has authority
that has NOT been granted by a principal - ANSWER: Agency by Estoppel
This type of agency is created when actions lead another person to assume that one
is an agent (Example- you have a key to neighbors home and show the property) -
ANSWER: Ostensible Agency
If a buyer hasn't signed a buyer's rep agreement, then who is representing the
buyer? - ANSWER: No one
This establishes a relationship with a broker - ANSWER: The Buyer/Tenant
Representation agreement
This can be written or oral - ANSWER: Disclosure of Representation
These are required to place their own selfish interests behind that of their clients. -
ANSWER: Fiduciaries
A licensee isn't required to provide the IABS when... - ANSWER: the licensee meets
with a party that is already represented
A broker is obligated to treat who honestly? - ANSWER: client, customer, and agents
Broker must have written consent to act as... - ANSWER: an intermediary
IABS form is the property of... - ANSWER: TREC
,Broker Bob is the broker/owner of ABC Realty. Agent Bill at ABC Realty is a listing
agent. Agent Sue, also at ABC Realty, is working with a buyer who is being
represented by the firm. Agent Sue's buyer wants to purchase Agent Bill's listing
In the above transaction, Broker Bob will: - ANSWER: Remain neutral and refrain
from providing advice and opinion to either party
The IABS should contain - ANSWER: How the broker will be compensated
Broker Steve, having no agents, is a solo practitioner. He has a client buyer that
wants to purchase one of his listings. The process that Broker Steve must use is: -
ANSWER: Intermediary without appointments
A fiduciary relationship is based on - ANSWER: trust
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who
wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not
enter into an
agency relationship with City Realty.
In the above transaction, who is representing the buyer? - ANSWER: No body
because the buyer is a customer.
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who
wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not
enter into an
agency relationship with City Realty.
In the above transaction, who is City Realty representing? - ANSWER: The seller,
because City Realty is a subagent of ABC Realty in this transaction
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who
wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not
enter into an
agency relationship with City Realty.
What type of transaction is this? - ANSWER: cooperative (co-op)
An exemption to using the Information About Brokerage Services form is: - ANSWER:
a lease for less than 1 year with no sale anticipated
A licensee not associated with the client's broker but who is representing the client
through a
cooperative agreement with the client's broker is known as: - ANSWER: Subagent
,This must be in at least 10 point type, must have the exact language prescribed in
the License Act
and must be provided to a buyer or seller at the first substantive discussion of a real
estate
transaction - ANSWER: IABS (Information About Brokerage Services)
Jeffrey wants to see property that your company has listed; he does not want to be
represented.
The agent must: - ANSWER: give Jeffrey the IABS form
A licensee must present the Information About Brokerage Services form: - ANSWER:
at the first substantive discussion of a real estate transaction
A licensee has a listing with a seller and has a buyer's representation agreement
signed with a
buyer who desires to purchase this agent's listing. How is the agent operating? -
ANSWER: as a non-appointed associate in an Intermediary relationship
TREC was established in: - ANSWER: 1949
Which of the following is the real estate licensing authority in Texas? - ANSWER:
TREC
A termination date in a listing agreement must be: - ANSWER: definite
Which of the following is NOT an agent's duty to a client? - ANSWER: Trust
These are the duties: OLDCAR: Obedience, loyalty, disclosure, confidentiality,
accounting, reasonable care
The duty of ___________ means that an agent must follow all of the lawful
instructions of
the client. - ANSWER: obedience
Jerome is a licensed agent who desires to sell his mother's home. Jerome has the
property
listed with his brokerage firm and finds a buyer himself to buy mom's home. Jerome
should: - ANSWER: Disclose to the buyer in writing that the seller is his mother.
If an agent sells their own property, acting as a principal, the agent must: - ANSWER:
disclose to the party in writing that they are a licensed agent
Confidential information between client and agent should be: - ANSWER: kept
confidential forever
In most states other than Texas, the most common method of dealing with in-house
transactions between client buyers and sellers is: - ANSWER: dual agency
, When handling escrow funds for clients, the License Act requires that funds be
deposited in
a "reasonable time". A reasonable time is defined as: - ANSWER: 2 business days
The listing agreement should contain: - ANSWER: the legal description of the
property
Which of the following are elements of a listing? - ANSWER: the terms of sale, such
as the sales price and financing terms acceptable to the seller.
Sam listed his property with three different real estate brokers. In each agreement
he reserved
the right to sell the property himself without paying a commission. The type of listing
that
Sam signed with each broker was an: - ANSWER: open listing
Data used for a CMA should be no older than: - ANSWER: 6 months
The report used to give a seller or buyer an indication of market value is called: -
ANSWER: Comparative Market Analysis
Listings may be terminated by: - ANSWER: death, either party - broker or client, or
mutual agreement
Listings are the property of the: - ANSWER: broker
Duties of principal to agent - ANSWER: CRIP: Compensation, Reimbursement,
Indemnification (protect the agent from suffering a loss due to the
agent's reliance in information received from the principal), Performance
If a broker dies what happens to the listing with the seller? - ANSWER: it
automatically terminates
If a broker sells a property on behalf of a seller without a signed listing agreement,
the courts
will most likely declare that the broker is: - ANSWER: a volunteer, an agent in a listing
agreement that is unenforceable against the seller, and unable to enforce payment
of the commission
Commission rates are set by? - ANSWER: client and broker
The TAR® Buyer Representation Agreement in our textbook: - ANSWER: authorizes
Intermediary, is limited to the market area designated in the agreement and
authorizes the agent to show properties to competing buyers
If a broker's agents are independent contractors, there can be a policies and
procedures manual
