T. Agency/Brokerage Flashcards
Texas license holder Norman is meeting with prospective buyer clients Andy and Sandy Silk for the first time. Before Norman and the Silks enter into a buyer agency relationship, what is Norman required by Texas law to do?
A. Ask the Silks to provide two forms of identification.
B. Obtain the Silks’ written consent to have Norman’s broker act as their intermediary.
C. Have the Silks sign and date a non-disclosure form.
D. Provide the Silks with the Information About Brokerage Services form.
D. Provide the Silks with the Information About Brokerage Services form.
Put yourself in Norman’s place. There’s something you are required by law to do when you’re first meeting with prospective clients. Is it asking your prospective clients to provide two forms of identification? No, that’s not a legal requirement, so option A is incorrect. Let’s look at option B. If you were in Norman’s situation, would the first thing you do when meeting with a prospective buyer client be to have that client give you written consent to act as an intermediary? No, this isn’t required at this stage of the game. So, option B is incorrect. Does the licensee need to have the prospective clients sign a non-disclosure form? Non-disclosure forms aren’t even used in real estate agency situations, so that means option C is incorrect, also. That leaves us with option D, which is correct. By law, Norman is required to present prospective clients with the Information About Brokerage Services (IABS) form and explain the types of agency relationships they may have with a real estate professional. The IABS form is required at the outset of most real estate relationships, with a few exceptions. Remember that the IABS form isn’t a type of agency agreement, and the IABS form must be provided before any agency agreements are formed.
You are the agent for buyers Mr. and Mrs. Jansen. The Yothers are the sellers, and their mortgage holder is Richard Steele. To which of these parties must you disclose your agency status?
A. The Jansens only
B. The Yothers only
C. Richard Steele only
D. All parties to the transaction, including your clients
B. The Yothers only
It’s time to disclose your agency status. To whom must you make that disclosure? You definitely won’t make that disclosure to your own clients, who already know you represent them. Therefore, options A and D are incorrect. You are required to make an agency disclosure to the parties involved in the transaction whom you do not represent. In this scenario, that’s the Yothers, which means that option B is correct. (Remember that Mr. Steele is not part of the transaction, so there’s no reason to make an agency disclosure to him.)
In which of the following situations is it okay for a Texas broker acting as an intermediary to disclose any confidential information about a party to the transaction?
A. When the property or transaction is valued over $250,000
B. When the broker’s sales agent is involved in the transaction
C. When the broker thinks it would help the party’s bargaining power for that information to be revealed
D. When it is required by law or court order
D. When it is required by law or court order
A broker acting as an intermediary may only disclose confidential information about a party to the transaction under certain circumstances. Do these circumstances have anything to do with the value of the property? No, which means that option A is incorrect. Neither is it okay to reveal confidential information because the broker’s sales agent is involved in the transaction; therefore, option B is incorrect. It’s never okay to reveal confidential information because the broker or sales agent thinks it would help bargaining power (unless the client has given the broker written permission to make such disclosure). Therefore, option C is incorrect. There are only a few situations in which it’s legally permissible to reveal a client’s confidential information, including when the disclosure is required by the law or a court order. Therefore, option D is correct.
Jesse has just received two offers for a listing. One is a lowball offer, and one is for the listing price. Which of the following is true?
A. Jesse must submit both offers to his seller client.
B. Jesse should determine which offer is best and submit that one to his seller client.
C. Jesse should not even bother to prepare a seller’s net sheet for the lowball offer.
D. Jesse should make a counter-offer on the lowball offer before submitting it to his client.
A. Jesse must submit both offers to his seller client.
A seller’s agent is required to present all offers to a client, except when the seller has instructed her agent in writing not to submit any more offers, or any offers below a certain amount. Option A suggests that Jesse should submit both offers, which is in keeping with his duties as an agent (and the correct answer). Licensees should present all offers and not give preference to an offer just because it was the first received or offers the highest sales price (so options B and C are incorrect). Unless Jesse is acting as an attorney in fact for his client (under a power of attorney), which would make him the client’s general agent, Jesse can’t make a counter-offer on the lowball offer. (That means option D is incorrect.) It’s up to the seller, not the licensee, to make all decisions about offers.
Douglas is the buyer’s agent for a Texas transaction in which May (from a different brokerage) was the listing agent for the seller, Mr. Harrison’s, property. From whom will Douglas receive his compensation?
A. From his own broker
B. From Mr. Harrison
C. From May’s broker
D. It depends
A. From his own broker
When it comes to compensation, the most important thing to remember is that a sales agent or associate broker must only be paid by his or her own broker. This is always true, regardless of whether the buyer, seller, or the man in the moon pays the commission to your broker. Generally, it’s the seller—in this case, Mr. Harrison—who pays his broker (who is May’s sponsoring broker) the commission. Then May’s broker will split that commission with the listing broker (Doug’s broker). Each of the two brokers will pay his/her sales agents the agreed-upon split of that broker’s commission. Confusing, yes, but the great news is, when the question asks who is going to pay a licensee’s commission, the answer is always that licensee’s broker. Sales agents and associate brokers (including Douglas) may receive compensation for real estate services only through their own broker.
Who has the ultimate responsibility for the sales agent’s actions in Texas?
A. The sales agent alone
B. The sales agent and their licensed personal assistant
C. The sales agent’s broker
D. The sales agent’s broker, along with any associate brokers
C. The sales agent’s broker
Although the sales agent is responsible for their actions, it is ultimately the broker who is responsible for the actions of their associated licensees, as well as other members of the firm.
Which of the following duties is Marie, Texas broker Dylan’s unlicensed assistant, prohibited from performing?
A. Answering the phone for Dylan and forwarding calls to him
B. Securing documents and other public information from the courthouse, utility companies, etc.
C. Submitting a listing for Dylan’s client, Carole, with the MLS
D. Providing advice to Dylan’s client, Shirley, about how much she should pay for the house she’s buying
D. Providing advice to Dylan’s client, Shirley, about how much she should pay for the house she’s buying
When it comes to determining who needs to hold a real estate license, here’s a good rule of thumb: If you’re performing a real estate activity for another person and for compensation (or the expectation of compensation), you generally must have a real estate license. In Texas, the law and rules dictate which activities require the person performing them to hold a real estate license—and which don’t. Unlicensed assistants may handle ministerial duties like answering and forwarding calls, obtaining public information, and even submitting listings and changes to listings to the MLS. (This means options A, B, and C are all incorrect.) However, any task that requires a Texas real estate license to perform—like offering real estate pricing advice—must not be performed by an unlicensed person. Therefore, option D is correct. Remember, serious penalties await those found guilty of performing acts of real estate brokerage without a license, including an administrative penalty of up to $5,000 per violation, civil penalty, court costs, and more.
