Agency and RE License Act

Question 1

What is the definition of agency?

Answer 1

A relationship established between a principal and a real estate agent

Question 2

What do we call a relationship in which one party places special trust, confidence, and reliance in another?

Answer 2

Fiduciary Relationship

Question 3

Real estate brokerage is based on what kind of agency?

Answer 3

Special agency

Question 4

Under what circumstances would a client be responsible for misrepresentation committed by his or her real estate agent?

Answer 4

If the client actually knew of the misrepresentation

Question 5

At whose level is agency formed?

Answer 5

At the broker level, never the salesperson level

Question 6

What is a duty agent?

Answer 6

The person who is given the opportunity to answer the phones or greet someone walking off the street in an attempt to find leads

Question 7

How does a buyer typically come in contact with a real estate agent?

Answer 7

By calling on a sign in the yard or calling on an ad in a publication

Question 8

What are fiduciary duties designed to do?

Answer 8

Place the client’s needs above the desires of the brokers and salespeople

Question 9

What gives consumers the idea that real estate professionals have a high level of expertise in real estate?

Answer 9

The state requires them to be licensed.

Question 10

These days, how do consumers often view a home purchase?

Answer 10

As an investment

Question 11

In a home sale involving 2 licensees, absent a buyer representation agreement, who do the brokers represent?

Answer 11

Contrary to what the buyer may think, absent a buyer representation agreement, both the listing broker and the selling broker represent the seller.

Question 12

What is the primary reason that you need to have a clear understanding of agency concepts?

Answer 12

Because of the increased interest in litigation

Question 13

What four types of agency positions are recognized in Texas?

Answer 13

Seller’s agent (single agent)
Subagent
Buyer’s agent (single agent)
Intermediary

Question 14

Under what conditions can a supervising broker appoint a license holder associated with the broker to represent one party to a real estate transaction?

Answer 14

With written consent of all parties

Question 15

When must a seller’s agent provide a written statement about brokerage services to a party?

Answer 15

At the time of the first substantive dialogue with the party

Question 16

When must a buyer’s agent provide a written statement about brokerage services to a party?

Answer 16

At first contact with the seller, landlord, or either party’s agent

Question 17

In the real estate world, the agent relationship is between a licensee and one of the following:

Answer 17

A seller
A buyer
A landlord
A tenant

Question 18

Agency

Answer 18

A relationship established between a principal and a real estate agent

Question 19

Agent

Answer 19

The person who is authorized to represent and act on the behalf of another person

Question 20

Brokerage Agreement

Answer 20

A written or oral agreement for brokerage services in exchange for compensation

Question 21

Client

Answer 21

A person who is being represented by an agent

Question 22

Consumer

Answer 22

A person requesting or receiving licensed services

Question 23

Customer

Answer 23

A person who is not represented by an agent, but receiving ministerial acts

Question 24

Minesterial Act

Answer 24

Acts performed by a licensed agent for a customer that are informative or clerical in nature

Question 25

Fiduciary Relationship

Answer 25

A relationship in which one party places special trust, confidence, and reliance in another

Question 26

Principal

Answer 26

The person who hires the agent and delegates to the agent the responsibility of representing the principal’s interests

Question 27

Universal Agency Relationship

Answer 27

the principal empowers the agent to perform any and all actions that may be legally delegated to an agency representative.

Question 28

General Agency

Answer 28

the principal delegates to the agent ongoing tasks and duties within a particular business or enterprise.

Question 29

Special Agency

Answer 29

the principal delegates authority to conduct a specific activity, after which the agency relationship terminates.

Question 30

In most instances

Answer 30

real estate brokerage is based on a special agency.

Question 31

Agency Formed At...

Answer 31

is always formed at the broker level, never at the salesperson level.

Question 32

broker of record for the office

Answer 32

is responsible for everything that is done by the broker and her sales people.

Question 33

Upon becoming a client

Answer 33

the buyer will receive a much higher degree of service, and it will be the salesperson’s job to get the buyer the best transaction possible.

Question 34

Fiduciary Duties

Answer 34

Licensees who practice real estate in Texas have strong responsibilities to the people whom they are representing.

Question 35

There are several reasons why the question of representation is an important one:

Answer 35

Consumer Representation- Consumers on both sides of a transaction lean heavily on the skill, judgment, and competency of their agents. Intricacy- of relationships with clients. Multiple Brokers- Most of the sales of residential property involve two licensees: a listing broker and a selling broker. Professionalism in the Industry Public View of the Profession Increased Litigation- the primary reason that a clear understanding of agency concepts is necessary.

Question 36

Texas Real Estate License Act (TRELA)

Answer 36

defines four positions a broker might take with a seller, buyer landlord, or tenant: Seller's Agent Sub Agent Buyer's Agent Intermediary

Question 37

Seller's Agent

Answer 37

When a licensee represents either a seller/ landlord or a buyer/tenant directly and exclusively as an agent.

Question 38

Sub Agent

Answer 38

Where “cooperating” licensees, of differing firms, are subagents of the listing supervising broker of the principal.

Question 39

Intermediary

Answer 39

where a licensee represents both sides of a transaction in an agent-client capacity.

Question 40

Dual Agency

Answer 40

Not Allowed in Texas

Question 41

Texas Law Requires

Answer 41

that seller agents provide to a party to a real estate transaction at the time of the first substantive dialogue a written disclosure that explains the four agency positions.