Part 4 Flashcards
What is a risk of renaming an acquired real estate company to match your existing firm’s name?
A. TREC may deny the license renewal
B. You may inherit the liabilities of the old name
C. You could lose agents who don’t want to start fresh with new branding
D. You are required to retrain all agents under a new curriculum
C
What is one major risk of keeping the name of the acquired company if it’s tied to the previous broker’s identity?
A. The new company must also take on all the previous broker’s debts.
B. TREC could see it as a deceptive practice, assuming the previous broker is still in charge.
C. The name must be trademarked again to avoid lawsuits.
D. The agents will be required to carry dual licenses under both names.
B
Which of the following is not a direct cost or challenge associated with changing a real estate company’s name?
A. Updating signs and marketing materials
B. Re-establishing trust with existing clients
C. Notifying TREC and other service providers
D. Paying for media campaigns to regain recognition
B
What is a major long-term risk of naming a real estate brokerage after the broker/owner?
A. It creates confusion with other brokerages that use personal names.
B. It may reduce the future resale value of the business due to limited brand transferability.
C. It violates TREC’s naming guidelines if the broker actively manages sales.
D. It prevents the company from expanding outside of the broker’s home market.
B
What is the correct first step a broker should take after selecting a potential business name for their brokerage?
A. Print marketing materials to claim the name quickly
B. Register the name with TREC before checking its availability
C. Check the Texas Secretary of State’s records to avoid duplication
D. File a DBA with the local Chamber of Commerce
C
Which of the following reflects a professional and functional brokerage office setup based on the guidelines provided?
A. Allowing clients to meet with agents at their desks if no conference room is available
B. Placing bathrooms at the back of the office behind the agents’ work area
C. Designing a reception area that is clean, warm-toned, and separated from internal office noise
D. Using extra furniture from storage to quickly furnish the conference room
C
Why is it considered unprofessional for real estate agents to meet clients at their personal desks instead of in a conference room?
A. Clients often prefer to meet at coffee shops instead
B. Personal desks lack privacy, formality, and proper meeting space
C. TREC requires conference room use for all closings
D. Agents may lose their desk space after hours
B
What is a potential downside of assigning private offices to high-producing sales agents?
A. It may lower their overall productivity.
B. It limits client access to shared amenities.
C. It reduces collaboration and spontaneous interaction with others.
D. It prevents brokers from monitoring their work.
C
What is one reason a broker might charge a fee for a private office?
A. Private offices require separate licensing and higher insurance costs.
B. To make up for the high cost of square footage these offices occupy.
C. Brokers are required to provide free private offices to managers only.
D. To encourage agents to work more remotely instead.
B
Why might semi-private offices be used as a transitional space in a real estate office layout?
A. They offer the same benefits as private offices at half the cost.
B. They provide full-time privacy while maximizing agent capacity.
C. They are often used as a step up from the bullpen before agents earn private offices.
D. They are legally required before agents can access client records.
C
Which of the following best explains why landscaping should be considered a capital expense in a brokerage setup?
A. Landscaping can be expensed monthly and written off like office supplies.
B. Poor landscaping has no legal impact but can lower staff morale.
C. Landscaping affects a client’s first impression and may require major investment if previously neglected.
D. TREC requires landscaping improvements before a license is issued.
C
What is the primary financial risk of using bootstrapping to fund a new real estate business?
A. It limits your ability to expand into multiple markets immediately.
B. You must repay personal funds with interest, reducing your profit margins.
C. If the business fails, you may lose your personal savings and have limited capital left for future growth.
D. It prevents you from hiring staff until you gain investor approval.
C
What is the main advantage of using debt financing rather than raising investor capital when starting a real estate business?
A. You are not required to pay interest on borrowed funds
B. You retain full ownership and equity in your business
C. Lenders will offer unlimited funding if you have collateral
D. You are not required to sign any formal loan agreements
B
Why might a traditional lender refuse to issue a loan to a new real estate business?
A. Real estate is considered an illegal use of borrowed funds
B. The borrower cannot offer financial assets as collateral
C. The lender must take an ownership stake in the business
D. Banks only lend to publicly traded companies
B
What is a critical risk of using personal collateral to secure a business loan?
A. You may be forced to sell part of your business to repay the loan
B. Your license with TREC may be suspended if payments are missed
C. If you default, you could lose personal assets like your home or car
D. Interest rates will automatically double on missed payments
C
Which type of investor typically requires the business to have an aggressive exit strategy and proven rapid growth potential?
A. Bootstrapping backers
B. Friends and family
C. Angel investors
D. Venture capitalists
D
What is a significant downside of receiving funding from an angel investor?
A. You must give up all control of your company
B. They require collateral like banks
C. You must give up a portion of equity and commit to frequent reporting
D. They require TREC approval for your business model
C
. When is it most appropriate to seek an angel investor for your real estate business?
A. Before using any of your own money or resources
B. After bootstrapping and personal loans have been exhausted, but before seeking venture capital
C. Immediately after forming your LLC
D. Once the company is generating steady profits and has multiple locations
B
Which of the following is not listed as an SBA-supported topic to help small business owners?
A. Starting a Business
B. Marketing and Advertising
C. Surviving in a Down Economy
D. Real Estate License Law
D
Why is it important to build a professional team even if you have no employees or sales agents?
A. You are legally required to have at least three external consultants
B. You will need experts in areas where you lack knowledge or skill
C. It’s required by TREC when applying for a broker license
D. It helps reduce startup costs and avoids licensing requirements
B
What is one recommended way to evaluate a potential team member before hiring them?
A. Ask for a portfolio of real estate listings they’ve managed
B. Ask how many agents they’ve worked with in your ZIP code
C. Ask questions about their responsiveness, personality, and fees
D. Request that they sign a TREC-approved contract
C
