Law of Agency Exam

The agency relationship is established between: - -The sponsoring broker and principal This is not a fiduciary obligation owed to a client - -Inspection Due to the unique nature of the fiduciary responsibility of obedience, a licensee has an obligation to follow an unlawful instruction of a client under these circumstances: - Never A licensee who violates the fiduciary responsibility of loyalty to the client is guilty of: - Unethical behavior, unprofessional behavior, illegal behavior. A material fact is - -That a reasonable person might feel is important A broker acting as a special agent of the seller may initial changes to the contract on behalf of his client. - -False In Order to provide reasonable care and diligence to a client, a licensee must: - -Have basic knowledge of real estate law A customer would not be entitled to: - -The broker's opinion of value A sub agent of the seller must disclose the following about financial status of the buyer: - -The buyer has not yet applied for the loan; the buyer must sell his existing house before new purchase; the buyer wants to assume the sellers existing loan. The relationship between the broker and a sale associate is usually - -Of general agency An owner of several single family residential properties hires a licensed real estate broker to manage hr properties, the licensee approves all tenants, signs agreements,makes decisions regarding repairs, pays all expenses between the owner and the property manager - -Is of general agency As an agent of the broker, sales associates may not fo the following: - -Ask the listing associate prospective buyers which are below the listing price Acting as a subagent, Lucy Liu shows a property to a buyer, is contracted by her college roommate, Chelsea Nguyen, whom she has not seen or spoken to in 12 yrs. Chelsea's job has just relocated to town and she wants to purchase a condominium. If Jasmin acts Law Law as a subagent of the seller, which of the following is true? - -Ask the listing associate about possible plumbing leaks and drainage problems Jasmine smith , sales associate with oak ridge realty, is contracted by her collage roommate, Chelsea Nguyen, whom she has not seen or spoken to in 12 years. Chelsea's job has just relocate to town and she wants purchase a condominium. If jasmine acts as a sub agent of the seller, the following statement is true: - -Jasmine act as a subagent. But only with full disclosure and permission of the seller. A buyer contracts to purchase a property from seller for $87,000. Two weeks before closing, a buyer's agent for another company delivers an offer for $86,000. The listing associate should: - -Present the offer to the seller as potential back-up offer for further negotiation. Broker Jimmy Salinas of Salinas realty listed and sold a proper for Harold Powers, during which time Jimmy became aware the Harold was about to file for divorce and bankruptcy. Harold now wishes to quickly purchase another property which is listed by another brokerage company on a seller financing arrangement. As a subagent of the seller broker Jimmy: - -Cannot disclose Harold's financial situation since he gained the information in the course of an agency relationship. Robert Hays, sales associate with West Point Realty, has listed a property for Blake Wong at $128,000. After three months, not a single offer has been received. Robert has been asking Blake to lower the listing price to $123,000, while reading the morning paper, Robert discovers that the local refinery will be relocating over 700 employees to the city writhing the next 60 days. The pay scale for these new employees puts them well within the price range for blake's house. Robert then checks his voicemail and discovers a message from Blake from the evening before instructing Robert to lower the listing price to $119,000. At that price, the property is well within Roberts ability to purchase for himself. - -Robert should contact Blake to inform him of the news article, and encourage him to hold out a little longer. The duty of disclosure is greater to a client than to a customer - -True Confidential information obtained about a client during during a transaction must remain confidential only until the termination of the agency relationship - -False A salesperson licensee acts for the licensed broker with whom he or she is associated. - -True General agency commonly exists between: - -Salesperson and broker General agency commonly exists between the - -salesperson and broker Correct Law Law Special agency occurs when - -the principal gives an agent limited authority to act on his behalf A broker can buy a property listed with him under which of the following conditions? - only if full disclosure is made to the seller of the broker's involvement as a purchaser Which of the following statements is true of a listing agent? - -He must present every written offer to the seller A salesperson owes all of the following fiduciary duties except: - -prepare a power of attorney for the buyer A listing agent tells a buyer-customer that the seller is under pressure to sell because of a pending divorce and a possible foreclosure. Such disclosure is - -unacceptable because of the fiduciary duty owed the owner who did not authorize disclosure Section 5.008 of the Texas Property Code requires a written seller's disclosure notice for: - -certain residential properties. If the seller's written notice of disclosure is not given by the effective date of the contract - - the buyer may: - -terminate the contract within seven days after receiving the notice. The listing associate, Betty Principi, gives the seller the Seller's Disclosure of Property Condition. The seller says there is really nothing to disclose and since he broke his writing hand playing golf, he asks Betty to fill out and sign the form for him. Which of the following is true? - -Although Betty may explain each section of the form, she should neither mark the boxes nor sign on the seller's behalf. The best protection for a buyer who is concerned about the quality of the title might be to - -a. purchase title insurance. b. have an abstract of A or B Standard title insurance coverage would not protect the buyer from - -the government right of eminent domain. Correct The mortgagee's title insurance protects the - -lender. The buyer pays cash for a vacant lot relying on the seller's old survey which showed the lot measured 180 feet by 260 feet. After commencing construction of his new home, he discovers the lot measures only 165 feet across the front and the neighbor behind him has a fence which encroaches nearly three feet across the back of the buyer's lot. These boundary shortages are - -excepted from the standard title policy. Law Law None of the following deaths on a property need be disclosed to a potential purchaser except - -friend visiting the owner slips and falls on the pool tile. While acting as a subagent, Harry Tanaka 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 may - -not reveal the information. Which of the following must be disclosed to a potential purchaser? - -A series of drive by shootings in the neighborhood. A neighbor who has frequent and loud parties several times a month. . The property was treated recently for a termite infestation. All of the above. While doing a listing brief with a potential seller, the sales associate is told that there was a major fire on the property which caused substantial damage two years ago. Since all renovations and repairs resulting from the fire were covered by the homeowner's insurance policy, the owner insists that potential purchasers should not be given information about the fire. The sales associate: - -should decline the listing. A licensee might misrepresent by - -omission and/or commission. The subagent showing a property to a buyer forgets to mention that even though theproperty is connected to the city water and sewage, it also has an abandoned septic