Real Estate: Texas Law of Agency EXAM Questions
and Answers Graded A+
Open Listing - ✔✔✔The broker verbally agrees to attempt to find a ready, willing, and able buyer for
a seller, but this is not an exclusive arrangement between the seller and broker. The seller has shared
this same opportunity with other brokers. It is just a matter of which broker is able to locate a buyer
first as to who receives the commission.
Ostensible Agency - ✔✔✔This occurs when a court declares that the licensee was acting like an
agent. The judge would then in effect say, "Therefore, you were the agent." This means that now the
licensee and the broker are responsible for their actions and that if the complainants were damaged
by the actions of the licensees, then the office is liable for those actions.
Principal - ✔✔✔The person who hires the agent and delegates to the agent the responsibility of
representing the principal's interests
procuring cause agent - ✔✔✔The agent who ultimately caused the buyer to purchase the home and
earned the commission
Real estate brokerage is based on what kind of agency? - ✔✔✔Special Agency
Renunciation - ✔✔✔When the broker wants to end the relationship
Rescission - ✔✔✔is when both the client and the broker agree to end the relationship that they are
in.
Revocation by the Client - ✔✔✔Some sellers will not be happy with the lack of progress in showing
and selling their home. The client can request the listing be revoked. This is termed
Seller's Agent - ✔✔✔A broker licensee who represents the seller in a transaction (also known as the
listing agent)
Single Agency - ✔✔✔when a licensee represents a either a seller/landlord or a buyer/tenant directly
and exclusively as an agent. This relationship is normally bound by a written agency agreement, or
listing agreement having a specified and limited duration
Special Agent - ✔✔✔also known as a specific agent. Under a special agency agreement, the principal
delegates authority to conduct a specific activity, after which the agency relationship terminates. In
most cases, the special agent may not bind the principal to a contract. In most instances, real estate
brokerage is based on a special agency.
specialized real estate transaction - ✔✔✔usually involves three or more parties and a number of
party representatives. Often a person involved in a transaction incorrectly assumes that everyone in
the transaction knows the role of everyone else. exchanges, syndications, farm sales, and leases of
industrial and commercial properties
Sponsoring Broker - ✔✔✔A person who has responsibility for the real estate activities of a
salesperson or another broker working under him or her (also known as an employing broker)
Subagency - ✔✔✔practiced between brokerage firms where "cooperating" licensees, of other firms,
are subagents of the listing supervising broker of the principal. Subagency is legal in Texas. A subagent
is a license holder who:
Represents a principal through cooperation with a broker, and the consent of a broker representing
the principal: and
, Is not sponsored by, or associated with the principal's broker
Subagency - ✔✔✔refers to a specific client representation relationship between a property broker
or real estate agent and another real estate broker or agent who brings the buyer to the property.
Subagency exists when the buyer is a customer and there are two brokers involved.
Subagent - ✔✔✔A licensee who is not affiliated with the client's broker, but who represents the
client as a cooperating broker
The best way to practice intermediary is - ✔✔✔with appointments
The Law of Agency - ✔✔✔An agency relationship imposes fiduciary duties on both the client and the
agent, but mostly the agent. These duties are both moral and ethical, but also legal
Third Party - ✔✔✔defined as a person who is not a principal in a real estate transaction; in other
words, not in an agency relationship with a licensee. Customers are considered third parties, until
such time as they might choose to become clients by entering into an agency agreement. (customers)
Unintended dual agency - ✔✔✔is when an agent creates a dual agency relationship by taking on
responsibilities that normally should be done by a cooperating agent?
Universal Agent - ✔✔✔the principal empowers the agent to perform any and all actions that may be
legally delegated to an agency representative. The instrument of authorization is the power of
attorney.
What are agreements between brokers and clients called? - ✔✔✔Employment Contracts
What are the 3 ways a broker enters into an employment contract with a principal? -
✔✔✔Listing/Landlord Agreement
Buyer/Tenant Agreement
Property Management Agreement
What are the fiduciary duties assigned to do? - ✔✔✔Place the client's needs above the desires of
the brokers and salespeople
What are the five professional ethics canons: - ✔✔✔Fidelity
Integrity
Competence
Consumer Information Form
Discriminatory Practices
What are the four sections of the Code of Ethics? - ✔✔✔Preamble
Duties to Clients and Customers
Duties to the Public
Duties to REALTORS®
What are the three types of misrepresentation? - ✔✔✔Innocent
Negligent
Fraudulent
What are the two forms of informal dispute resolution? - ✔✔✔Ombudsman and Mediation
What exception exists to the duty of obedience when working with a client? - ✔✔✔An agent is not
bound by the duty of if the principal's directions are not legal.
What four types of agency positions are recognized in Texas? - ✔✔✔Seller's agent (single agent)
Subagent
and Answers Graded A+
Open Listing - ✔✔✔The broker verbally agrees to attempt to find a ready, willing, and able buyer for
a seller, but this is not an exclusive arrangement between the seller and broker. The seller has shared
this same opportunity with other brokers. It is just a matter of which broker is able to locate a buyer
first as to who receives the commission.
Ostensible Agency - ✔✔✔This occurs when a court declares that the licensee was acting like an
agent. The judge would then in effect say, "Therefore, you were the agent." This means that now the
licensee and the broker are responsible for their actions and that if the complainants were damaged
by the actions of the licensees, then the office is liable for those actions.
Principal - ✔✔✔The person who hires the agent and delegates to the agent the responsibility of
representing the principal's interests
procuring cause agent - ✔✔✔The agent who ultimately caused the buyer to purchase the home and
earned the commission
Real estate brokerage is based on what kind of agency? - ✔✔✔Special Agency
Renunciation - ✔✔✔When the broker wants to end the relationship
Rescission - ✔✔✔is when both the client and the broker agree to end the relationship that they are
in.
Revocation by the Client - ✔✔✔Some sellers will not be happy with the lack of progress in showing
and selling their home. The client can request the listing be revoked. This is termed
Seller's Agent - ✔✔✔A broker licensee who represents the seller in a transaction (also known as the
listing agent)
Single Agency - ✔✔✔when a licensee represents a either a seller/landlord or a buyer/tenant directly
and exclusively as an agent. This relationship is normally bound by a written agency agreement, or
listing agreement having a specified and limited duration
Special Agent - ✔✔✔also known as a specific agent. Under a special agency agreement, the principal
delegates authority to conduct a specific activity, after which the agency relationship terminates. In
most cases, the special agent may not bind the principal to a contract. In most instances, real estate
brokerage is based on a special agency.
specialized real estate transaction - ✔✔✔usually involves three or more parties and a number of
party representatives. Often a person involved in a transaction incorrectly assumes that everyone in
the transaction knows the role of everyone else. exchanges, syndications, farm sales, and leases of
industrial and commercial properties
Sponsoring Broker - ✔✔✔A person who has responsibility for the real estate activities of a
salesperson or another broker working under him or her (also known as an employing broker)
Subagency - ✔✔✔practiced between brokerage firms where "cooperating" licensees, of other firms,
are subagents of the listing supervising broker of the principal. Subagency is legal in Texas. A subagent
is a license holder who:
Represents a principal through cooperation with a broker, and the consent of a broker representing
the principal: and
, Is not sponsored by, or associated with the principal's broker
Subagency - ✔✔✔refers to a specific client representation relationship between a property broker
or real estate agent and another real estate broker or agent who brings the buyer to the property.
Subagency exists when the buyer is a customer and there are two brokers involved.
Subagent - ✔✔✔A licensee who is not affiliated with the client's broker, but who represents the
client as a cooperating broker
The best way to practice intermediary is - ✔✔✔with appointments
The Law of Agency - ✔✔✔An agency relationship imposes fiduciary duties on both the client and the
agent, but mostly the agent. These duties are both moral and ethical, but also legal
Third Party - ✔✔✔defined as a person who is not a principal in a real estate transaction; in other
words, not in an agency relationship with a licensee. Customers are considered third parties, until
such time as they might choose to become clients by entering into an agency agreement. (customers)
Unintended dual agency - ✔✔✔is when an agent creates a dual agency relationship by taking on
responsibilities that normally should be done by a cooperating agent?
Universal Agent - ✔✔✔the principal empowers the agent to perform any and all actions that may be
legally delegated to an agency representative. The instrument of authorization is the power of
attorney.
What are agreements between brokers and clients called? - ✔✔✔Employment Contracts
What are the 3 ways a broker enters into an employment contract with a principal? -
✔✔✔Listing/Landlord Agreement
Buyer/Tenant Agreement
Property Management Agreement
What are the fiduciary duties assigned to do? - ✔✔✔Place the client's needs above the desires of
the brokers and salespeople
What are the five professional ethics canons: - ✔✔✔Fidelity
Integrity
Competence
Consumer Information Form
Discriminatory Practices
What are the four sections of the Code of Ethics? - ✔✔✔Preamble
Duties to Clients and Customers
Duties to the Public
Duties to REALTORS®
What are the three types of misrepresentation? - ✔✔✔Innocent
Negligent
Fraudulent
What are the two forms of informal dispute resolution? - ✔✔✔Ombudsman and Mediation
What exception exists to the duty of obedience when working with a client? - ✔✔✔An agent is not
bound by the duty of if the principal's directions are not legal.
What four types of agency positions are recognized in Texas? - ✔✔✔Seller's agent (single agent)
Subagent
