Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Real Estate License > Law of Agency > Flashcards

Law of Agency Flashcards

1
Q

TRELA established when?

A

1939

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

TREC established when?

A

1949?

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

REALTOR

A

is a licensed sales agent who is a member of the National Association of REALTORS® (NAR

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

four major types of agency acts:

A

listing, buying, property management, leasing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

These are the four components required to form an agency relationship

A

Agent

Principal

Mutual agreement

Fiduciary obligation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

agency by actual authority

A

refers to actions an agent has been authorized to complete on behalf of a princcipal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

2 types of authority

A

express and implied

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

agency by ratification

A

is when a license holder acts without authorization on behalf of a principal and the principal accepts those actions after the fact, thus affirming the actions taken and creating retroactive agency.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

ostensible agency

A

occurs when a principal allows a license holder to act in such a way as to cause a third party to believe that license holder is the principal’s agent.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

agency by estoppel

A

is agency that is imposed by law when it is determined that ostensible agency existed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

agency coupled with an interest

A

When a license holder is participating in a real estate transaction for which they have a personal interest,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

types of agencies

A

general, special, universal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

IABS informs clients of:

A

a broker’s minimum duties required by law; how a license holder can represent a party in a real estate transaction, the types of real estate license holders

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

SDN

A

Sellers disclosure notice

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

3 types of misrepresentation issues:

A

innocent, negligent, fraudulent

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

3 types of disclosure

A

required disclosures, permitted disclosures, unlawful disclosures

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

If the seller does not provide the buyer with a completed Seller’s Disclosure Notice before signing the contract, the buyer has a legal right to:

A

terminate the contract within 7 days of receiving the notice

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

defect

A

is an item that was installed or is attached to the home that has an imperfection.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

malfunction

A

is when something is designed or built to perform a certain function and no longer does so.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Guerrero v. Sanchez

A

stigmatized properties should be disclosed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

types of listing agreements

A

open listing, net listing, exclusive agency, exclusive right to sell listing

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

open listing

A

multiple real estate brokers (and the owners themselves) have the right to sell the property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

net listing

A

the broker’s commission comes from the difference between the seller’s established minimum price and the price that the buyer is willing to pay. legal in texas

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

exclusive agency

A

the seller agrees to list their property with only one broker during the listing term. However, the seller still has the right to sell the property themselves, without having to pay the broker a commission (or they can agree to a reduced commission

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

exclusive right to sell

A

It prohibits the seller from listing the property with another agent AND states that the seller must pay the listing agent commission even if the seller finds the buyer themselves

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Exclusive Agency Addendum to Listing (TAR 1403)

A

allows the seller to name excluded prospects and to designate how much (if any) the seller will owe the listing broker if the excluded prospect purchases the property.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

CMA

A

comparative market analysis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

MLS

A

multiple listing services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

sold listings

A

houses sold within 6 months; considered comparable and are used by appraisers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

you cannot post listing on social media unless

A

you have written consent from seller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

In a seller subagency, who does the subagent represent?

A

the seller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Which of the following IS a major reason why many listing brokers prefer to collaborate with buyer’s agents more than subagents?

A

subagency presents listing brokers with the liability of sales agents they have not trained

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

SC:0

A

subagent commission is one

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

BC

A

buyer representative commission

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

substantive communications

A

is communication that involves a substantive discussion relating to specific real property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

payable compensation

A

when an offer that meets all parameters set out in listing agreement is made, but the seller rejects the offer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

TXR 1410, Termination of Listing.

A

realtors use this to provide written notice to owner that a listing agreement is terminated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

seller agency

A

is the relationship between a real estate agent and the seller in the brokerage of homes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

earned commission

A

either when seller accepts an offer from buyer or if the seller breaches the listing agreement

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

term

A

is the span of time for which this contract will be enforced

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

market areas

A

geographic regions in which similar homes compete for buyers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

protection period

A

a period of time after the buyer’s representation term ends in which the agent can still get compensation for their role in a transaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

single agency

A

the agent represent only one side of the transaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

dual agency

A

illegal in texas; agent represents both buyer and seller

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

exclusive broker agreement

A

binds the buyer into working only with that broker/agent for the specified duration of the contract.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

non-exclusive broker agreement

A

leaves the buyer free to work with other agents to acquire a home.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Which of the following is TRUE of a relationship created between a buyer and an agent?

A

Agency can be expressly stated by the agent and buyer or implied by their actions. The existence of the agency relationship relies heavily on the intent of both the buyer and the agent. While a contract is not required, it is in the best interests of both the buyer and agent to have one.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

actual agency

A

Refers to actions an agent has been authorized (orally or in writing) to complete on behalf of a principal.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Apparent or ostensible agency

A

When a principal allows a license holder to act in such a way as to cause a third party to believe that the license holder is the principal’s agent. (Agency by estoppel protects third parties harmed by ostensible authority.)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

agency by ratification

A

When the principal accepts an agent’s actions after the fact, thus affirming the actions taken and creating retroactive agency.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

syndicate

A

is a financial services group formed to handle large transactions that would be too hard or impossible for an individual person or entity to handle.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

1031 Exchange

A

lets an investor sell a property, reinvest the proceeds in a brand new property, and defer all capital gain taxes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

limited dual representation

A

form for dual representation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

undisclosed dual agency

A

s an action taken by unscrupulous agents in order to take advantage of under-informed clients. When this situation occurs, the agent is treating both parties like clients, but without the proper notice.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

creation of agency requires two essential components:

A

consent and control

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

Is implied agency a form of accidental agency?

A

yes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

2 categories of sales:

A

cooperative and in-house

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

cooperative sale

A

most common of 2 types of sales. - involves a seller (and their representative) and a buyer (and their representative).

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

subagency

A

is a license holder, not affiliated with the seller’s broker, who brings an unrepresented buyer to the transaction via a cooperative agreement with the seller’s broker.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
60
Q

mutual rescission

A

both parties terminate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
61
Q

revocation

A

client terminates

62
Q

renunciation

A

agent terminates

63
Q

unilaterally terminate

A

they can terminate the relationship without getting permission from the client.

64
Q

operation of law

A

If there has been a change in law that affects the property involved in the agency agreement, that can be cause for termination of the relationship- such as rezoning of property

65
Q

independent contractor

A

is someone who is bound by contract to perform a certain job, but who is not considered an employee for federal or state income tax purposes.

66
Q

IRS Code Section 3508(b) says that sales agents must be licensed to be considered independent contractors.

A

true

67
Q

Revenue Act of 1978

A

is known as safe harbor — a place of refuge for those industries Congress felt were victims of an overly aggressive IRS practice of attempting to reclassify independent contractors as employees (federal level)

68
Q

TEFRA

A

Tax Equity and fiscal responsibility of 1982

69
Q

IRS 20 factor test

A

determines if entity has more/less control which determines if worker is an independent contractor or employee

70
Q

three buckets for 20 factor test

A

behavioral control, financial control, type of relationship

71
Q

behavioral control

A

refers to whether there is a right to direct or control how a worker does their work.

72
Q

How many categories can behavioral control factors fall into?

A

four categories: degree of instruction, training, evaluation systems, and type of instructions given.

73
Q

The factors of significant investment, unreimbursed expenses, and opportunity for profit or loss are all part of what’s known as:

A

financial control

74
Q

These factors (from the 20-Factor List) go into the “type of relationship” bucket:

A

Written contracts

Employee benefits

Permanency of the relationship

Services provided as key activity of the business

75
Q

what is the biggest factor when deciding whether a worker should be classified as an employee or an independent contractor.

A

control

76
Q

special agency

A

is a form of agency relationship in which agents are limited in scope and are only authorized to perform acts permitted by their principal (i.e, broker-client).

77
Q

general agency

A

is a form of agency relationship in which the principal is responsible for the acts of their agent as long as the agent is acting within the scope of their duties (i.e., broker-sales agent).

78
Q

The duties a principal owes a broker in an employment agreement are these:

A

Compensation

Availability

Performance

Reimbursement

Indemnification

79
Q

direct activities

A

are activities (that usually require a license) in which a person directly helps another buy, sell, or lease real property.

80
Q

indirect activities

A

are day-to-day activities that are influential, but more difficult to classify as to whether a license is required.

81
Q

restricted special agency

A

The relationship is limited to one transaction at a time.

The TAR listing agreement provides opportunity to get principal permission for this type of agency relationship.

82
Q

The sales agent doesn’t receive commission directly from the listing broker but from the cooperating broker.

A

broker with cooperating brokers sales agent

83
Q

The agent is usually operating as an independent contractor and not an employee.
The acts the agent can perform independently are often more restricted at the beginning of the relationship.
The broker is responsible for all brokerage acts performed by the agent.
general agency

A

broker with sponsored agent

84
Q

Which of the following describes a condition that must exist in order for a licensed broker to share earned commissions with a foreign broker?

A

A texas license holder must conduct negotiations within texas

85
Q

to solve for the part, you need to multiply the total by the

A

percentage

86
Q

what is the difference between morals and ethics

A

ethics is external and standardized; morals is internal

87
Q

FFHA

A

Federal fair housing act protects people from discrimination; redlining is prohibited
protects people from discrimination when they are renting, buying, or securing financing for housing

88
Q

redlining

A

refusing to offer mortgages for homes in a specific area in the city

89
Q

Concerning requirements for new buildings, if state or local laws demand more than the requirements of the federal law, people must:

A

comply with the more stringent state or local laws

90
Q

ADA

A

americans with disabilities act: 1. identified and defines protected disabilities 2. public access building codes

91
Q

TILA

A

Truth in Lending Act: requires lenders to provide consumers with loan cost information so that consumers can comparison shop for certain types of loans

92
Q

RESPA

A

real estate settlement procedures act: requires lenders to provide good faith estimates of closing and settlement costs; reduces unnecessarily high settlement costs
outlaws kickbacks, referral fees, and unearned fees

93
Q

SEC

A

securities and exchange commission protects investors, maintain fair, orderly, and efficient markets and facilitate capital formation

94
Q

Sherman Antitrust Act

A

passed in 1890 prohibiting the formation of trusts or monopolies in the marketplace

95
Q

group boycott

A

is an agreement among two or more competitors not to do business with another competitor for the purpose of inducing the other competitor to change its business practices.

96
Q

6 canons

A

fidelity, integrity, competency, consumer information, discriminatory practices, IABS; rules for the conduct of license holders in the practice of real estate

97
Q

What form does the Canons of Professional Ethics and Conduct say must be on display in a readily noticeable location in each of the real estate brokers places of business?

A

consumer protection notice 1-2

98
Q

SES

A

standards and enforcement services will notify the license holder if it intends to initiate disciplinary proceedings

99
Q

complaint outcomes for license holders end in

A

TREC advisory letter, refund to consumer or temporary suspension

100
Q

The NAR Code of Ethics consists of a

A

preamble and 17 articles

101
Q

ADR

A

alternative dispute resolution ex. mediation

102
Q

Which of the following is NOT true about mediation?

A

mediators decide who is correct and who is wrong

103
Q

ministerial duties

A

duties of honesty and fairness and accounting and reasonable skill and care (clients and customers alike)

104
Q

texas protected classes

A

Race

Color

Religion

Sex

National origin

Ancestry (state not federal)

Familial status

Disability

105
Q

arbitration

A

as a forum where parties and counsel present their positions before an impartial third party who renders a specific award.

106
Q

3 types of misrepresentation

A

innocent, negligent, fraudulent

107
Q

How long does a consumer have to file a DTPA lawsuit?

A

within 2 years after the date on which the violation occurred

108
Q

Penalty violations from DTPA

A

$20,000 per violation; up to $250,000 more for consumers over 65

109
Q

Public remedies

A

are those enforced by the Texas attorney general’s office

110
Q

Private remedies

A

are civil lawsuits brought by consumers against the alleged violators

111
Q

3 things license holders can do to avoid DTPA violations

A
  1. ensure anything you publish is accurate 2. do not talk about the condition of the property 3. leave condition comments to the seller
112
Q

Most lawsuits brought against texas real estate professionals are under the:

A

TDTPA- Texas Deceptive Trade Practices Act

113
Q

If an agent has taken unfair advantage of another person because of their lack of knowledge and experience to a grossly unfair degree, the court will say the agent is guilty of?

A

an unconscionable action

114
Q

Texas DTPA

A

established in 1973-primary consumer protection law in Texas

115
Q

Tort Reform

A

is a judicial movement that tries to limit the amount of recourse and awards that can go to a complainant

116
Q

Duties a principal owes a broker:

A

CAPRI: compensation, availability, performance, reimbursement, indemnification

117
Q

What should come first in an agency policy outline for a brokerage company manual?

A

a general statement of agency philosophy

118
Q

Which of the following fiduciary duties survive agency termination?

A

accounting and confidentiality

119
Q

Which of the following fiduciary duties never terminates?

A

duty of confidentiality

120
Q

appointees

A

the agents representing the buyer and/or seller in an intermediary relationship

121
Q

A broker may appoint themselves as the appointed license holder in an intermediary relationship

A

FALSE

122
Q

according to the Residential Real Estate Brokerage industry, ______ of buyers who dealt with a cooperating broker were under the false impression that their broker was representing them in a sales transaction.

A

71%

123
Q

In 2005, Texas made changes to policies regarding dual representation by:

A

allowing dual representation to only be offered by brokers via intermediary process

124
Q

What did Senate Bill 489 do?

A

Introduce intermediary practice as an option

125
Q

Who can make real estate disclosures through verbal statements?

A

both the seller and the agent

126
Q

Who determines the brokerage fee charged by a listing broker?

A

the principal and the broker

127
Q

exclusive right to represent

A

buyer is exclusively represented by the agent and pays the agent commission

128
Q

non-exclusive right to represent

A

buyer is free to work with other agents, agents liability is limited, and agent can be compensated if they find the home

129
Q

non-exclusive not for compensation

A

buyer is free to work with other agents and not required to compensate

130
Q

Which of the following statements about pre-qualification and pre approval are true?

A

pre qualification involves figuring out appropriate home prices for the buyer, and pre-approval involves determining if a buyer is credit worthy

131
Q

A consumer wishing to pursue a DTPA claim must provide _________ written notice before filing suit. This is how long the agent has to respond to the complaint.

A

60 days

132
Q

rescission

A

means the contract is canceled and the parties are restored legally and financially to the position they were in before entering the contract

133
Q

A seller is obligated to disclose prior water penetration – even if the defect has been cured – due to possible residual damage.

A

False

134
Q

The Residential Lead-Based Paint Hazard Reduction Act of 1992, also known as ______________, was meant to protect families from exposure to lead from paint, dust, and soil.

A

Title X

135
Q

Is a paint inspection or risk assessment for lead-based paint/hazards mandatory?

A

No, a homebuyer may waive the inspection opportunity.

136
Q

Notice of Information from Other Sources

A

is a helpful tool and may be utilized by TAR members when communicating with potential buyers about property conditions or information from other sources.

137
Q

Which of the following is a true statement about puffing?

A

puffing is simply marketing and an opinion

138
Q

BPO

A

brokers price opinion and similar to CMA

139
Q

earnest money must be deposited within

A

a reasonable time ( two business days)

140
Q

GFE

A

good faith estimate

141
Q

Agents can specialize in things such as:

A

clients, property types or services provided

142
Q

REO

A

real estate owned- describes property that is owned by a lender as the result of a failure to find a third-party buyer at a foreclosure auction.

143
Q

backup offer

A

is an offer made on a property already under contract

144
Q

equitable title

A

is the contractual right of the purchaser to conveyance of a property once all terms and conditions of the contract are met (also known as equitable interest)

145
Q

tortious interference

A

someone is submitting an amazing offer to intentionally interfere with the transaction

146
Q

senate bill 2212

A

agents need to disclose who they are representing - equitable interest

147
Q

Which of the following is most likely covered by an E&O insurance policy?

A

negligence claim

148
Q

Dodd-Frank Act

A

installed stricter financial regulation to address predatory lending practices such as providing easy to obtain loans for least qualified buyers

149
Q

3 main antitrust acts

A

Clayton Act, Sherman Antitrust Act, Federal Trade Commission Act (FTC Act)

150
Q

Per se violations are acts that are inherently illegal; they’ve been proven illegal over and over again.

A

TRUE

151
Q

ACTR

A

ACT to lessen Risk: avoid control transfer and retain

Real Estate License (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions