Download LAW OF AGENCY EXAM QUESTIONS AND DETAILED ANSWERS GET 100% CORRECT ANSWERS. and more Exams Business and Labour Law in PDF only on Docsity!
LAW OF AGENCY EXAM QUESTIONS
AND DETAILED ANSWERS GET 100%
CORRECT ANSWERS.
⫸ Agency can exist without regard to who pays the fee. Answer: True ⫸ The real estate broker who allows his sales associates to list their own homes through the brokerage without charging the usual listing fee has created. Answer: gratuitous agency. ⫸ It is important to determine in every case whether an agency relationship exists due to issues relating to. Answer: legal effects. professional and ethical responsibility. imputed notice. all of the above. ⫸ In Texas, an individual licensed as a real estate agent and a real estate inspector could list the property for the seller and inspect the property for the buyer. Answer: False ⫸ The seller may be liable for the acts and representations of all of the following except. Answer: the buyer's broker. ⫸ A court would consider notification to the agent as notification to the agent's principal because of the rule of. Answer: imputed notice. ⫸ A third party is entitled to. Answer: accurate information.
⫸ An agency relationship may be terminated by all of the following except. Answer: the property is rezoned causing a drop in value such that the broker will not make adequate commission to cover his marketing expenses. ⫸ Although a termination date must be included in the listing contract, it is permitted to include a rollover provision if agreed in writing between the broker and the owner. Answer: False ⫸ Georgio listed his property for sale with Tony Principi, principal broker for Principi Realty. Georgio decides to seek a tenant for his property rather than sell so he asks Tony to remove the property from the market. If Tony agrees to release Georgio from his obligations under. Answer: ⫸ the contract, agency has been terminated by. Answer: mutual rescission. ⫸ Which of the following would be an example of termination of agency by operation of law?. Answer: Death of the owner. ⫸ The fiduciary duty which remains even after the termination of the agency relationship is. Answer: confidentiality ⫸ Which of the following is not a way to create agency?. Answer: expiration ⫸ Which of the following is required to create an agency relationship?. Answer: a belief that the relationship exists ⫸ Express agency. Answer: can be oral or written ⫸ Implied authority is. Answer: not specifically given to an agent
⫸ General agency commonly exists between the. Answer: salesperson and broker Correct ⫸ Special agency occurs when. Answer: 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?. Answer: 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?. Answer: He must present every written offer to the seller ⫸ A salesperson owes all of the following fiduciary duties except. Answer: 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. Answer: 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. Answer: certain residential properties. ⫸ If the seller's written notice of disclosure is not given by the effective date of the contract. Answer: ⫸ the buyer may. Answer: 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?. Answer: 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. Answer: a. purchase title insurance. b. have an abstract of A or B ⫸ Standard title insurance coverage would not protect the buyer from. Answer: the government right of eminent domain. Correct ⫸ The mortgagee's title insurance protects the. Answer: 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. Answer: excepted from the standard title policy. ⫸ None of the following deaths on a property need be disclosed to a potential purchaser except. Answer: 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. Answer: not reveal the information.
⫸ The fact that child molestation occurred on a property would be an example of physical stigma which would have to be disclosed. Answer: False ⫸ Megan's Law is a Texas law requiring the registration of sex offenders. Answer: False ⫸ Texas law specifically exempts sellers and real estate agents from a duty to disclose information relating to sex offenders. Answer: True ⫸ Title insurance coverage for the lender is called. Answer: Mortgagor's title insurance Incorrect ⫸ On the issue of AIDS/HIV disclosure. Answer: TREC rules prohibit disclosure ⫸ Under Megan's Law, individual states. Answer: must develop procedures for registering sex offenders ⫸ A seller tells a prospective listing agent not to reveal to potential buyers that the police have twice raided the house next door for suspected drug activity. You should. Answer: decline the listing and do not work with this seller ⫸ The listing agent tells the buyer that the seller has installed a new air conditioner as agreed in the contract, but in fact the seller only repaired the existing air conditioner. The licensee is. Answer: liable ⫸ A property whose value has been adversely affected by events that took place on the property. Answer: is considered stigmatized ⫸ A property whose value has been lowered by a murder that occurred there has suffered. Answer: psychological stigma
⫸ Which of the following is essential to create an express agency relationship?. Answer: Consent and Control ⫸ In Texas, express authority to act for a principal. Answer: may be written or oral. must be clear and unambiguous. must be written if a broker wishes to have the right to bring a lawsuit for commission. all of the above ⫸ Maria Seller listed her townhouse with Bob Broker. Bob mails out flyers, places ads in the local paper, and posts notices on the community bulletin board. What kind of authority has Bob exercised?. Answer: implied ⫸ Betty Broker has a listing on Sylvia Seller's home. Without Sylvia's permission, Betty tells a prospective buyer at an open house that Sylvia is desperate to sell within the next 30 days. Betty Broker is a/an. Answer: implied agent of the buyer. ⫸ Harry, a sales associate with Monterey Realty, has taken a listing on Betty Seller's home.While showing the property to a prospective buyer, which of the following statements by Harry might lead a jury to imply an agency relationship exists between Harry and the buyer?. Answer: "Sellers in our market typically accept less than the listing price." ⫸ Sue, a "For Sale By Owner" non-licensee, wishes to market and sell her own property and informs all licensees that while they may show her property, they must seek compensation from the buyer. Sue does allow her friend Mary, sales associate with Newport Realty, to place the brokerage sign on the property and even gives Mary a key to the house for easy access. Mary subsequently secures a buyer for the property. After closing, the buyer sues Mary and Sue, claiming that Mary misrepresented the age and condition of the roof. If Sue claimed she should not be held responsible because Mary was not her agent, the court might find that the relationship between Mary and Sue was one of. Answer: ostensible agency.
⫸ The written listing agreement between the broker and the seller creates. Answer: express agency. ⫸ Only the broker who has the privity of the contract with the seller may initiate a lawsuitagainst his or her client. Answer: True ⫸ The type of listing that gives the broker the greatest amount of security is the. Answer: exclusive right-to-sell listing. ⫸ A seller listed his property exclusively with Saldivar Realty. Even though the property sold during the period of the listing, if the seller was not required to pay a commission to Saldivar Realty, what type of listing agreement probably existed between the seller and Saldivar Realty. Answer: Exclusive agency ⫸ A seller agrees to list his property with Firth of Clyde Realty. The broker's commission will be anything remaining from the proceeds of the sale once the seller's loan balance and closing costs are paid. The seller and Firth of Clyde Realty have what type of listing. Answer: ⫸ agreement?. Answer: Net ⫸ Basic services that an agent offers to sellers include all of the following except. Answer: mediation services. ⫸ A seller's agent is an advocate of the seller. Answer: True ⫸ One of the benefits of exclusive seller agency is that the agent of the seller may not be responsible for the misinformation or misstatements of a material fact made by a buyer's agent to the buyer. Answer: True
⫸ A type of agency whereby the broker represents both buyer and seller is. Answer: intermediary. ⫸ Bay Realty practices exclusive seller agency. In an in-house sale, the buyer. Answer: always Bay Realty's customer. ⫸ Binnacle Realty practices exclusive seller agency. When selling another broker's listings, sales associates with Binnacle Realty will always seek to act as. Answer: subagent of the listing broker's client. ⫸ One of the disadvantages of exclusive seller agency is that the broker may lose buyers who want or need representation. Answer: True ⫸ Advantages of exclusive seller agency include all of the following except. Answer: 100 percent loyalty and confidentiality for the buyer. ⫸ Argyll Realty provides representation services to both buyers and sellers but never acts as. Answer: nonexclusive single agency. ⫸ Aloha Realty offers both seller agency and buyer agency, but does not offer services to buyers represented by Aloha Realty on properties listed by the firm. Jennifer, a sales associate for Aloha Realty, has shown Bob (one of the firm's represented buyers) numerous properties over the past few weeks. Another associate with Aloha Realty announces a new listing which Jennifer knows would be perfect for Bob. Given Aloha Realty's policy of non-exclusive single agency, which of the following would NOT be an acceptable course of action for Jennifer to take?. Answer: Make an exception to Aloha Realty's policy and show Bob the new listing.
⫸ A net listing requires that the. Answer: agent advise the seller of the market value of the property ⫸ The kind of listing that allows the seller to list with several brokers is the. Answer: open listing ⫸ A listing agreement that applies only to a specific buyer is called a No. Answer: one-time showing agreement ⫸ a subagent brings a full-price offer to the listing broker but is later told the seller has decided not to sell the property. The subagent. Answer: has no right to sue under the listing agreement ⫸ The seller says he will list with you as long as he gets enough to pay off his loan and closing costs. Your commission will be anything over that amount. This is an example of a No. Answer: net listing ⫸ If the broker chooses nonexclusive single agency as an office policy, then a represented buyer who wishes to be shown a property listed by that broker. Answer: must be referred to another broker if the buyer insists on being represented ⫸ If a licensee is representing the seller and is not associated with or sponsored by the listing broker, then the licensee is. Answer: a subagent of the listing broker's client. ⫸ The "other broker" noted in the TREC promulgated sales contract may be. Answer: a. the selling broker.b. the buyer's broker.c. the cooperating broker. all of the above
⫸. Answer: ⫸ The agency relationship is established between. Answer: The sponsoring broker and principal ⫸ This in not a fiduciary obligation owed to a client. Answer: 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 this circumstances. Answer: Never ⫸ A licensee who violates the fiduciary responsibility of loyalty to the client is guilty of. Answer: Unethical behavior, unprofessional behavior , illegal behavior. ⫸ A material fact is. Answer: 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. Answer: False ⫸ In Order to provide reasonable care and diligence to a client, a licensee must. Answer: Have basic knowledge of real estate law ⫸ A customer would not be entitled to. Answer: The broker's opinion of value ⫸ A sub agent of the seller must disclose the following about financial status of the buyer. Answer: 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.
⫸ 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. Answer: Cannot disclose Harold's financial situation since he gained the information in the course of an agency relationship.
