Part 6 Flashcards
Why did NAR adopt its Code of Ethics in 1913?
A. To raise license exam standards
B. To establish uniform sales commission rates
C. To protect the professional image and reputation of real estate practitioners
D. To compete with other national trade associations
C
Why did NAR adopt its Code of Ethics in 1913?
A. To raise license exam standards
B. To establish uniform sales commission rates
C. To protect the professional image and reputation of real estate practitioners
D. To compete with other national trade associations
C
A buyer refuses a home inspection and insists on proceeding. What is the agent’s ethical next step?
A. Move forward since the buyer is waiving the right
B. Have them sign a release and close the deal
C. Proceed, but make them pay a higher commission
D. Consult the broker before taking any further steps
D
A license holder sees a listing they believe they could market better and contacts the seller directly. What ethical rule has likely been violated?
A. Disclosure obligations
B. CE education requirements
C. Respect in prospecting practices
D. Proper inspection referrals
C
A buyer is confused about a seller disclosure form, but the agent rushes them to sign it without full explanation. What did the agent fail to uphold?
A. Negotiation ethics
B. Disclosure responsibilities
C. Marketing transparency
D. Prospecting boundaries
B
What is implied about the broker’s influence on company culture?
A) Brokers are expected to act as mediators in agent disputes
B) Brokers have minimal control over day-to-day agent behavior
C) Brokers influence agent behavior primarily through performance metrics
D) Brokers set the tone for ethical behavior across the organization
D
According to the passage, what is the most effective way for a broker to reinforce ethical standards within the brokerage?
A) Posting the code of ethics in the office
B) Relying on agents to study ethics independently
C) Conducting regular ethics training sessions
D) Delegating ethical decisions to team leaders
C
What is the primary reason a broker should go beyond TREC and NAR minimum ethical requirements?
A) To reduce legal liability
B) To increase profitability through marketing ethics
C) To provide clear guidance for real-world situations agents may face
D) To meet continuing education standards
C
What is the broker’s role in maintaining ethical behavior during multiple-offer situations?
A) To prioritize offers from long-term clients
B) To ensure agents use persuasion to win the bid
C) To guarantee all parties are treated fairly and offers are represented honestly
D) To advise agents to avoid presenting low offers
C
What is the ethical expectation regarding other brokerages’ clients and listings?
A) Compete for them if your brokerage can offer better service
B) Respect them and focus on building your own business
C) Target them only if they express dissatisfaction
D) Approach them only through social media or public platforms
B
According to the text, which approach reflects ethical recruitment practices?
A) Targeting agents from competitor firms to weaken rival brokerages
B) Promising unrealistic earnings to attract high-volume producers
C) Relying on the brokerage’s culture and reputation to attract talent
D) Focusing on hiring agents who already have client pipelines
C
When a top-performing agent from another firm expresses interest in joining your brokerage, what is the ethical way to proceed?
A) Offer higher commission immediately to secure the switch
B) Encourage them to break their current contract if necessary
C) Proceed transparently while respecting any contractual or confidentiality obligations
D) Ask them to share internal details about their current brokerage
C
What is a key ethical risk when designing commission splits or bonus structures?
A) Agents may become too competitive with each other
B) Brokers might face pressure from top producers
C) The structures may unintentionally encourage unethical behavior
D) Lower-performing agents may feel discouraged
C
Why is additional oversight important when multiple agents from the same brokerage are involved in a transaction?
A) It helps the broker track commission splits more effectively
B) It ensures faster closings and higher revenue
C) It reduces the likelihood of dual-agency lawsuits
D) It ensures all parties are treated fairly and ethically
D
What should guide referral practices within a brokerage?
A) The agent’s existing business relationships
B) The potential for a commission bonus
C) The client’s best interests
D) The referring agent’s past success with similar deals
C
What is the Texas law that governs the real estate profession?
A) Texas Real Estate Code (TREC)
B) Texas Real Estate Compliance Act
C) Texas Real Estate License Act (TRELA)
D) Real Estate Brokerage and Practice Act
C
- What is the primary function of law in a society?
A) To enforce social rules through courts
B) To control economic decisions
C) To increase government revenue
D) To manage political elections
A
What term is used to describe movable personal property?
A) Easement
B) Chattel
C) Fixture
D) Patent
Chattel
What is the correct distinction between property law categories?
A) Public property vs. private property
B) Fixed assets vs. liquid assets
C) Real property vs. personal property
D) Tangible property vs. intangible property
C
Which of the following is an example of “conversion” in a real estate context?
A) Depositing earnest money into a separate trust account
B) Using a client’s funds for unrelated personal expenses
C) Charging a client for inspection services
D) Collecting a referral fee with written disclosure
B
What is “commingling” in the context of real estate brokerage?
A) Holding a dual license in two states
B) Mixing client and brokerage funds in the same account
C) Sharing listings with other brokerages
D) Delaying a closing due to bank holidays
B
Which of the following is an example of “conversion” in a real estate context?
A) Depositing earnest money into a separate trust account
B) Using a client’s funds for unrelated personal expenses
C) Charging a client for inspection services
D) Collecting a referral fee with written disclosure
B
What is the purpose of the Texas Real Estate License Act (TRELA)?
A) To regulate housing development standards
B) To outline state tax policies for real estate brokers
C) To govern the activities of licensed real estate professionals in Texas
D) To enforce zoning ordinances
C
What is the role of the Texas Real Estate Commission (TREC) under TRELA?
A) To handle property tax assessments
B) To enforce fair housing laws
C) To create and enforce rules refining the law
D) To represent real estate agents in legal disputes
C
What does SUBCHAPTER A of TRELA primarily cover?
A) Advertising regulations and ethics
B) Commission splits and brokerage policies
C) Definitions, education requirements, and general provisions
D) Closing procedures and escrow
C
Who is responsible for drafting and revising the real estate contract forms in Texas?
A) Texas Association of Realtors
B) Texas Real Estate Commission (TREC)
C) Texas Real Estate Broker-Lawyer Committee
D) Department of Housing and Urban Development
C
Which of the following is not a goal of the standardized contracts created by the Broker-Lawyer Committee?
A) Expedite transactions
B) Maximize broker commissions
C) Minimize controversy
D) Provide protection for the principals
B
How many total members are on the Texas Real Estate Broker-Lawyer Committee?
A) 12
B) 10
C) 13
D) 15
C
hy is the Broker-Lawyer Committee separate from TREC when it comes to contract approval?
A) To save time in contract drafting
B) To promote market-driven contract terms
C) To protect against bias by keeping drafting and adoption functions separate
D) To allow agents to write their own legal documents
C
Which group appoints the six attorney members of the Broker-Lawyer Committee?
A) Texas Supreme Court
B) Texas Bar Foundation
C) State Bar of Texas
D) Texas Attorney General’s Office
C
The Broker-Lawyer Committee has 13 members with:
6 brokers appointed by TREC
6 lawyers appointed by the State Bar of Texas
1 public member appointed by the Governor of Texas
