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Law of Agency > Module 6 > Flashcards

Module 6 Flashcards

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1
Q

An employment contract that creates an agency relationship used by buyers to employ a real estate broker to find the buyer a suitable property.

A

Buyer Representation Agreement

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2
Q

A required disclosure by a license holder of facts should reasonably be expected to know about a property.

A

Disclosure of All Material Facts

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3
Q

Federal legislation further defining the Sherman Anti-Trust Act, focusing on price discrimination, price-fixing, and unfair business practices.

A

Clayton Act

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4
Q

An agent may NOT deceive or defraud a customer.

A

Honest Dealing

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5
Q

Setting commission rates between groups of brokers in an area.

A

Price Fixing

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6
Q

The agent is held to the standards of knowledge, expertise, and ethics of the License Act.

A

Reasonable Care and Skill

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7
Q

Federal legislation that specifically deals with the illegal fixing of commission rates.

A

Sherman Anti-Trust Act

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8
Q

Creates buyer agency.

A

Buyer Representation Agreement

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9
Q

Federal legislation that specifically deals with illegal fixing of commission rates.

A

Sherman anti-trust act

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10
Q

Setting commission rates between groups of brokers in an area.

A

Price Fixing

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11
Q

An agent may not deceive or defraud a customer.

A

Honest Dealing

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12
Q

The agent is held to the standards of knowledge, expertise and ethics defined by TRELA.

A

Reasonable Care

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13
Q

NAR’s ABR Designation:
The duties we know as OLDCAR apply in all

A

states

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14
Q

Items that are benefits of buyer agency agreements:

A

Access to market data

Investment analysis if the property is going to be rented or held for appreciation or development

Assistance in “culling out” unsuitable properties

Assistance in obtaining financing

Assistance with negotiating

Assistance in preparing offers and negotiating strategies

Assistance with many of the details that must be taken care of in order to close a sale

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15
Q

Regardless of representation, all buyers should be provided with an _________________________ at first contact

A

with an oral or written disclosure of representation

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16
Q

Elements of a Buyer Representation Agreement

A

Term of the agreement

Brokers duties to clients and customers

Compensation agreement

Fair-housing language

Intermediary consent

The information about brokerage services form, acknowledged and dated

consent for broker to represent other buyers

general characteristics of the property search

buyers and broker obligations

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17
Q

Only a ________ may earn a commission and only a _________ my sue to collect a commission

A

broker

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18
Q

The listing agreement and buyer representation agreement is a(n) ______________

A

employment contract

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19
Q

Oral agency agreements are not enforceable against the ______________ but are enforceable against the broker.

A

client

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20
Q

Only a__________ may sue for commission.

A

broker

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21
Q

The _____________ is the broker who, through a series of uninterrupted activities, brought about the completion of a contract.

A

procuring cause of sale

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22
Q

A broker can not successfully sue for commission without a signed written ___________________

A

agency/compensation agreement

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23
Q

The broker must provide a(n) ________________ buyer who agrees to the sale terms required by the seller.

A

ready, willing, and qualified

24
Q

The buyer must not be under ______________

A

duress

25
Q

The license holder must disclose all facts that he or she know or should reasonably be expected to know that ________________ affect the value of or desirability of the property.

A

materially

26
Q

Any attempt by a group of brokers to set the commission rates in their area or between a group of brokerage firms would be considered ______________

A

Illegal Price Fixing

27
Q

Nick is looking for a home and calls Anna at ACME Real Estate Agency to inquire about several properties he saw online. Anna mentions that she represents ACME Real Estate Company and its clients. She also takes Nick’s contact information and asks in-depth questions about his needs and wants. Nick states that one of the most important considerations for him is that the home is in a neighborhood that has the highest likelihood of increasing in value. Anna advises Nick about several neighborhoods and recommends some properties that she thinks might be just right for him. She also sends Nick an email with some details about each of the homes. Anna then asks Nick if he would like to schedule an appointment with her to view the properties, and he agrees.

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What did Anna do that could expose her and her broker to liability?

A

She did not provide him with the Information About Brokerage Service (IABS) form before discussing Nick’s wants and needs.

28
Q

When Anna meets Nick for the appointment, she spends a few minutes discussing representation and explains the advantages of allowing her to represent him in the purchase of a home. Nick agrees that she should represent him, but he states that he will not sign the Residential Buyer/Tenant Representation Agreement. He prefers an oral agreement and states that he has always been true to his word. What is one of the most important facts for Anna to consider entering into an oral agreement?

A

Anna might not get paid!

29
Q

What course of action can be taken if Anna works very hard to find Nick a home, and then he uses a different license holder to submit the contract and buy the home?

A

No one may file suit for commission since they did not have a signed agreement to establish agency.

30
Q

The term of a representation agreement can be as short as _________

A

one day

31
Q

The parties to the Residential Buyer/Tenant Representation Agreement include: (select all that apply):

client
broker
sales agent
lawyer

A

client
broker

32
Q

A buyer can enter into multiple Buyer/Tenant Representation Agreements if

A

if the market areas do not overlap

33
Q

Buyer Scott signed a buyer/tenant representation agreement with Agent Sue at Acme Realty. Sue diligently searched for a suitable home in the market area designated in the agreement. On the way home from a day of looking at homes with Sue, Scott dropped into an open house held by an agent from City Realty. He was so impressed with the home that he made an offer that was accepted by the seller. The home purchased by Scott was in the market area designated in Paragraph 3 of the agreement. What is the likely consequence of Scott’s purchase?

A

Scott probably owes a commission on the purchase to Acme Realty.

34
Q

The term of the buyer/tenant representation agreement is

A

negotiable

35
Q

The broker will first seek to obtain payment of commission from

A

the seller in Paragraph 11B

36
Q

The protection period establishes a period of time where:

A

under certain conditions, the broker will be paid a commission after the agreement expires

37
Q

The length of the protection period is

A

negotiated between the client and the broker

38
Q

True or False: Clarity in compensation is one of the many good reasons to insist upon a written buyer representation agreement.

A

T

39
Q

True or False: Buyer agency agreements may be created orally or in writing, but by far the best method is to do so orally.

A

F

40
Q

True or False: The ABR® designation takes the fundamentals of agency law and looks deeper.

A

T

41
Q

True or False: A phrase one could use after the buyer has signed the buyer representation agreement might be: “Okay, now let’s talk freely about the house, price and terms you want to find.”

A

T

42
Q

True or False: The subagency relationship was not to the buyer’s advantage. It was more in favor of the seller, and awkward for the broker.

A

T

43
Q

True or False: Commission rates and any other means by which brokers are compensated by sellers and buyers are never negotiable between the parties.

A

F

44
Q

True or False: Prior to discussing the needs and wants of the buyer, the buyer should be provided the Information About Brokerage Service agency information form as required by the License Act.

A

T

45
Q

True or False: Only a broker may earn a commission and only a broker may sue to collect a commission.

A

T

46
Q

True or False: Any attempt to take short cuts and avoid compliance requirements will create possible license revocation or suspension by TREC.

A

T

47
Q

The listing agreement or buyer representation agreement is a/n _______.

A

employment contract

48
Q

Any attempt by a group of brokers to set the commission rates in their area or between a group of brokerage firms would be considered illegal price fixing. The federal laws that have the greatest impact in this area are the __________ and the __________.

A

Clayton Act, Sherman Anti-trust act

49
Q

The duties we know as ___________ apply in all states, and understanding these duties on the highest level establishes the agent’s credibility and competitive standing in the marketplace.

A

OLD CAR

50
Q

A benefit of a buyer-agency relationship is assistance in _________. Buyers’ agents will have a number of trusted lenders to refer, which is preferable to the random selection of a lender.

A

obtaining financing

51
Q

When written provisions are in conflict with oral provisions, the _________ ones virtually always prevail.

A

written

52
Q

An agent may not deceive, defraud or otherwise _____ with a customer in a dishonest manner.

A

deal

53
Q

________ agreements are not enforceable against the client, but are enforceable against the agent.

A

oral

54
Q

Most litigation over the payment of real estate commissions arises from disputes over who was the _________ of sale.

A

procuring cause

55
Q

The license holder must disclose all facts that he or she knows of or should reasonably be expected to know that materially affect the value of or desirability of the property. This includes ___________, _________, and _________.

A

disclosure of agency, environmental hazards, property conditions

56
Q

All parties to a real estate transaction have a right to be represented in the marketplace; brokers also have the right to determine what business relationships they choose to enter into, so long as they comply with ________.

A

federal fair housing law

Law of Agency (10 decks)

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