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Law of Agency > Module 1 > Flashcards

Module 1 Flashcards

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1
Q

Acts for or on behalf of another person

A

Agent

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2
Q

Synonym for the word principal.

A

Client

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3
Q

The payment of a fee for completing an agreed activity like agency.

A

Compensation

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4
Q

Involves trust, especially in regard to the relationship between an agent and principal.

A

Fiduciary

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5
Q

Compensation from harm or loss.

A

Indemnification

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6
Q

Doing what is required by the agency agreement.

A

Performance

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7
Q

The party who is represented by an agent.

A

Principal

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8
Q

The paying back of expenses incurred on behalf of someone else.

A

Reimbursement

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9
Q

Based on trust

A

Fiduciary

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10
Q

Protection against damage or loss

A

Indemnification

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11
Q

A person who receives limited brokerage services without establishing an agency relationship

A

Customer

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12
Q

Also known as the principal

A

Client

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13
Q

BLANK makes it illegal to practice any act of real estate brokerage without a license

A

The Texas Real Estate License Act (TRELA)

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14
Q

The agent must always remain loyal to the

A

principal

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15
Q

agency is the relationship between two parties

A

a principal and an agent

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16
Q

In an agency relationship, the client gives BLANK to the agent to work on the client’s behalf.

A

authority

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17
Q

Agency is the relationship between two parties, the BLANK and the principal.

A

agent

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18
Q

An agent must always remain BLANK to their client.

A

loyal

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19
Q

The role of an agent when working for the principal is always for the BLANK of the principal.

A

benefit

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20
Q

The BLANK relationship is based on trust.

A

fiduciary

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21
Q

The principal and the BLANK are the same person.

A

client

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22
Q

Texas Real Estate License Act (TRELA) Was enacted by legislation in 1939 to protect the public against

A

unscrupulous brokers and sales agents

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23
Q

A licensed broker may not pay a commission to or otherwise compensate a person directly or indirectly for performing an act of a broker unless the person is:

A

(1) a license holder; or

(2) a real estate broker licensed in another state who does not conduct in this state any of the negotiations for which the commission or other compensation is paid.

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24
Q

This is a multiple choice question. Once you have selected an option, select the submit button below
Agent Phillip received an earnest money check payable to the title company from a buyer. Five days later he found the check under some paperwork on his desk. He deposited the check immediately.

Decide if the actions are in violation of TRELA and could result in the suspension or revocation of the agent’s license.

A

Violation of TRELA

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25
Q

The Texas Real Estate Commission was created in

A

1949

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26
Q

Agent Dirk negotiated a transaction where the buyer wrote a $2000 earnest money deposit. The earnest money was deposited in Dirk’s escrow account. The transaction fell through, and feeling sorry for the buyer, he refunded the earnest money without the consent of the seller.

Decide if the actions are in violation of TRELA and could result in the suspension or revocation of the agent’s license.

A

Violation

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27
Q

Part of the licensing process is to determine

A

moral character

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28
Q

A broker may pay a fee to

A

another broker

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29
Q

Agent Dwayne discovered that a great way to get more listings was to tell homeowners in the neighborhood that a huge commercial project was about to commence that would seriously devalue property in the subdivision. The claim was false, but it did result in a number of listings.

A

Violation

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30
Q

Agent Willard got a call from a promising prospective buyer on one of the properties that he had put signs on without the owner’s knowledge. He went ahead and began negotiating a sale knowing that the seller had not even put it on the market. His rationale was that “Everything is for sale at some price.”

Decide if the actions are in violation of TRELA and could result in the suspension or revocation of the agent’s license.

A

Violation

31
Q

Agent Maggie was showing properties to a buyer who inquired about the racial makeup of the neighborhood. She declined to respond to the inquiry.

Decide if the actions are in violation of TRELA and could result in the suspension or revocation of the agent’s license.

A

Not a violation

32
Q

A broker works for a

A

client

33
Q

A broker works with a

A

customer

34
Q

A broker selling the listing of another broker

A

Cooperative Broker

35
Q

These are the duties to customers (third parties) in a transaction:

A

honesty

Disclosure of material fact

Handle all funds with care

Be responsible for written or oral statements

36
Q

These are the duties to a client.

A

Put the interests of the client first

Give full disclosure to the client (advice and opinions in addition to disclosing all pertinent facts - both material and other)

Exhibit trust and honesty

Exercise good business judgment

Be loyal to the principal

Be competent

37
Q

A person licensed by the Texas Real Estate Commission (TREC) to act as a broker or sales agent in a real estate transaction.

A

License Holder

38
Q

A broker who represents a seller, landlord, buyer or tenant. (2) Sales agent or broker license holders who represent the broker with whom they are associated.

A

Agent

39
Q

A license holder not associated with the seller’s broker, but who is representing the seller through a cooperative agreement, often through membership in a Multiple Listing Service (MLS), with the seller’s broker.

A

Subagent

40
Q

A broker selling the listing of another broker. A cooperative broker may complete the transaction as a subagent of the listing broker, or may represent the buyers under an agency agreement; he also known as the other broker

A

Cooperative Broker

41
Q

An individual holding a broker’s license issued by TREC. Brokers may act independently in conducting real estate transactions, or may engage other broker or sales agent license holders to represent them in the conduct of their real estate business.

A

Broker license holder

42
Q

A broker associated with and conducting all of his or her business as an agent of another broker.

A

Broker associate

43
Q

An individual holding a license issued by TREC - an agent of the sponsoring broker. He or she may conduct business only through his or her sponsoring broker.

A

Sales agent license holder

44
Q

A sales agent or broker license holder associated with and conducting business as an agent of his or her sponsoring broker.

A

Sales associate

45
Q

A broker representing the seller in a real estate transaction, also referred to as a Seller’s Broker, Listing Broker, or Listing Agent.

A

Seller’s agent

46
Q

A broker representing the buyer in a real estate transaction, also referred to as a Buyer’s Broker, Selling Broker, or Selling Agent.

A

Buyers agent

47
Q

A broker representing a landlord in a real estate transaction.

A

Landlords’ agent

48
Q

A person, sometimes called a principal, who engages the professional advice or services of another, called an agent, and whose interests are protected by the specific duties and loyalties of an agency relationship. Many of these duties are outlined in a listing or buyer/tenant representation agreement.

A

client

49
Q

A person who receives limited brokerage services without establishing an agency relationship.

A

customer

50
Q

Duties of Principal to Agent

A

Both Compensation and Indemnification

51
Q

Agent Bill is instructed to arrange for lawn mowing for a seller who has moved out of state. Bill pays for the mowing and submits an invoice to the seller.

A

Reimbursement

52
Q

Broker Sam sells a property for Seller Sue. At closing Broker Sam is to be paid a commission.

A

Compensation

53
Q

Seller Wanda lists a property with Broker Susan. Wanda completes a seller’s disclosure indicating that there are no defects. After closing, the buyer discovers major termite damage and considers a lawsuit. Wanda considers implicating the broker in the misrepresentation.

A

Indemnification

54
Q

Seller Jane lists with Broker Bob. The house is never in showing condition, and Jane continually tells Bob that “Now is not a good time to show”.

A

Performance

55
Q

Refusing to tell a buyer how long a property has been on the market.

A

Customer level only

56
Q

Helping the buyer formulate a negotiating strategy

A

Client level only

57
Q

Disclosing material facts about a seller’s property.

A

Both customer and client level

58
Q

Refusing to provide a negotiating strategy to a seller.

A

Client level only

59
Q

Providing public information related to the property, such as square footage and taxes.

A

Both customer and client level

60
Q

Telling a buyer that a seller’s property is overpriced.

A

Client level only

61
Q

Disclosing to a buyer that the current use of a property is in violation of deed restrictions.

A

Both customer and client level

62
Q

Presenting a comparative market analysis to a buyer, showing the property is overpriced.

A

Client level only

63
Q

Telling the seller that the buyer can offer more money for his property.

A

Customer level only

64
Q

Leading a buyer to believe that you are working in the buyer’s best interest.

A

Client level only

65
Q

The Texas Real Estate License Act was created in

A

1939

66
Q

The Texas Real Estate License act was created to ___________ the public.

A

protect

67
Q

TREC’s role is to administer the provisions of

A

The License Act

68
Q

____________ is a duty of the principal to the agent.

A

Indemnification

69
Q

The Canons of Professional Ethics and Conduct include

A

Integrity

70
Q

Agency Law does not require an agent to look after the best interests of a ________________

A

customer

71
Q

An agency relationship exists when on person, the BLANK, acts for or on behalf of another person, the BLANK

A

Agent, principle

72
Q

Which of the following is grounds for suspension or revocation of a real estate license by TREC?

A

Splitting a commission with a person other than a license holder

73
Q

The commission can deny licensure to an applicant based on the applicants BLANK

A

Determination of fitness

74
Q

A(n) BLANK is a broker selling the listing of another broker

A

Cooperative broker

Law of Agency (10 decks)

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