Law of Agency – Champions Exam Questions and Answers (Graded A)

Which of the following has the authority to suspend or revoke a Texas real estate license? - Answer- TREC Which of the following is an element of a listing agreement? - Answer- the agreement to pay a stated commission, usually a percentage of the sales price the IRS considers which of the following a violation of independent contractor status? - Answer- salesperson is told to work set hours, guaranteed a monthly minimum wage, has his licensing fees paid by the broker the TAR buyer representation agreement in or text book: - Answer- authorizes intermediary, authorizes the buyer to give the agent complete loyalty, establishes an exclusive market area The amendments in 1996 to the License Act state that an agent is not liable for a misrepresentation or concealment of material fact by a party if: - Answer- The licensee did not know of the falsity of the misrepresentation One who hires an agent to represent him is called a: - Answer- principal It is always a good idea to have: - Answer- The seller fill out the Seller's Disclosure Notice A real estate brokerage firm that practices buyer agency only has a lot of intermediary transactions. - Answer- false Which of the following is a statutory defense for a lawsuit brought about by DTPA? - Answer- Written information obtained from a government record A licensee is not liable for a misrepresentation or a concealment of a material fact made by a party to a real estate transaction if the seller did not disclose it to the agent. - Answer- true Actual awareness of a falsity, deception, or unfairness of an act under DTPA is known as: - Answer- knowingly The TREC was established in: - Answer- 1949 an exemption to using the Information About Brokerage Services form is: - Answer- a lease for not more than 1 year listings can be terminated at any time by mutual agreement - Answer- true fiduciaries are: - Answer- Held to the highest degree of good faith, Required to exclude selfish interest, Require to make disclosures of all relevant facts According to TREC advertising rules, the definition of advertisement includes all of the following, EXCEPT: - Answer- Communication from a licensee to his or her client real estate agents owe certain non-fiduciary duties to customers such as: - Answer- honesty and fairness an unlicensed assistant may: - Answer- host an open house the best way to create an agency relationship is to do so: - Answer- in writing a licensee must present the information about brokerage services form: - Answer- at the first substantive discussion of a possible transaction when actions lead another person to assume that one is an agent, this is known as: - Answer- ostensible agency listings may be terminated by: - Answer- death, insanity, mutual agreement when one person acts for another on their behalf it is known as: - Answer- an agency relationship Whether or not to appoint associates in an intermediary real estate transaction is: - Answer- At the discretion of the broker In Texas, Worker's Compensation must be paid for real estate agents by brokers: - Answer- false unlicensed assistants may: - Answer- be a transaction coordinator a broker usually establishes buyer representation through a form known as a: - Answer- buyer representation agreement for a broker to act as an intermediary there must be: - Answer- written consent the real estate agent works for or on behalf of a: - Answer- client All of the following are included in the Canons of Professional Ethics for real estate licensees, EXCEPT: - Answer- patience data used for a CMA should be no older than: - Answer- 6 months The Tax Equity and Fiscal Responsibility Act has which of the following tests for independent contractor status? - Answer- The salesperson signs a written contract with the broker stating the salesperson is not an employee a termination date on a listing must be: - Answer- definite The duty of _______ requires that the agent follow all of the lawful instructions of the client. - Answer- obedience _______ means that, if a single agent in the firm is working with both buyer and seller, another agent in the firm needs to be brought into the transaction so appointment can be made. - Answer- Intermediary with appointments only listings are the property of the: - Answer- broker disclosure of representation may be: - Answer- either oral or written The failure to remove an advertisement within a reasonable amount of time may be considered deceptive or misleading. - Answer- true Usually, a defamation claim requires evidence of: - Answer- A false statement made to someone other than the person who is allegedly defamed, A false statement, Damage to the person allegedly defamed by a false statement A broker is representing both sides in an in-house transaction. In this case, the broker is the: - Answer- intermediary There can be a policies and procedures manual for a real estate agent who is an independent contractor. However, - Answer- The broker cannot require mandatory compliance A signed employment agreement is necessary to: - Answer- sue for commission An agent in ABC Realty has a listing that is being sold by a buyer's agent whose license is also with ABC Realty. The broker will most likely: - Answer- Appoint the associates to represent their parties under intermediary rules The listing that allows the seller to list the property with multiple competing brokers at the same time and to sell the property personally without paying any broker a fee is a(n): - Answer- open listing An agent creates a (n) ____________________ to give buyers and sellers an indication of the market value of a property. - Answer- comparative market analysis Agency authority that is the result of the "norm," or what is considered customary, is: - Answer- Implied authority A listing is terminated by any of the following, EXCEPT: - Answer- The passage of exactly one year since the agreement was signed A broker has the power to terminate an agency agreement early, - Answer- If the principal is not cooperating with the broker's efforts to market the property A real estate agent generally gets paid: - Answer- commission Agents should always disclose whether or not a previous or current tenant has had AIDS or HIV-related illness. - Answer- false The IABS should be presented as the buyer is about to write an offer. - Answer- false all licensees are relators: - Answer- false The listing agreement should contain: - Answer- the legal description of the property 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 Your company sends out a memo that there is a mandatory sales meeting this week for the sales agents. - Answer- The IRS rule on independent contractor status could be violated. Only a broker may earn a commission and only a broker may sue to collect a commission. - Answer- true Confidential information between client and agent is: - Answer- Kept confidential forever Which of the following requirements must be satisfied if a broker seeks to enforce payment of a commission? - Answer- The broker must have a valid real estate license, The broker must have a signed employment agreement with a promise by the client to pay a commission, The broker must be the procuring cause of sale A broker is obligated to treat which of the following fairly? - Answer- customers, sellers, clients 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 a: - Answer- subagent