Unit 24 Exam Flashcards by Liza Abrasaldo

Match the following: Single agency, Customer, Designated agent, Special agent, Dual agent, General agent

A)
The broker’s policy to represent one side of a transaction only

B)
Employed by the client to do a single activity

C)
Employed by the client to do a multitude of related activities

D)
The broker agrees to represent both sides in the same transaction

E)
Appointed by the broker to be the firm’s sole representative of a client

F)
The unrepresented or third party in a transaction

Single agency = A
Customer = F
Designated agent = E
Special agent = B
Dual agent = D
General agent = C

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When a broker appoints one licensee in the firm to be the firm’s exclusive representative of a client, the broker has appointed

A)
a designated agent.
B)
a single agent.
C)
a facilitator.
D)
a general agent.

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In order for an agency to be created in Tennessee, the agent and client must have

A)
a gentleman's agreement.
B)
a disclosure statement.
C)
a written agreement.
D)
a verbal agreement.

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Match the following: Client or principal, Knowledge of adverse facts, Unrepresented party, One-to four-family residential property, Facilitator, Law of Agency

A)
Party to a transaction who must receive written disclosure

B)
The body of law that governs a broker representing a client

C)
Type of property where an owner must make written disclosure of property condition

D)
The represented party in a transaction

E)
A type of disclosure that must be made to all parties whether represented or unrepresented

F)
Another name for transaction broker

Client or principal = D

Knowledge of adverse facts = E

Unrepresented party = A

One-to four-family residential property = C

Facilitator = F

Law of Agency = B

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An agent who has acquired confidential information about a client is free to disclose such information upon the termination of the agency.

False

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Licensees are obligated to disclose in writing when acting on behalf of their immediate families.

True

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Match the following: Management Agreement, Procuring cause, Brokerage Agreement, Seller or seller’s agent, Exclusive and non-exclusive, In writing

A)
Tennessee requires that all agency contracts be in this format

B)
The person(s) who normally compensate a buyer's agent at closing

C)
Types of buyer agency agreements that exist in Tennessee

D)
The agency agreement between a broker and an owner who wishes to lease his property

E)
The licensee who caused a chain of events that resulted in the sale

F)
An employment contract requesting the professional services of the licensee

Management Agreement = D

Procuring cause = E

Brokerage Agreement = F

Seller or seller’s agent = B

Exclusive and non-exclusive = C

In writing = A

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Though buyer agency agreements in Tennessee must be in writing, management agreements may be verbal.

False

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A broker’s compensation at closing is ALWAYS a percentage of the final negotiated sales price.

False

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Match the following:
As big as or larger, Written and signed, Amount of commission, Exclusive-agency, Exclusive-right-to-sell, Immediately upon receipt

A)
An item included in all listing agreements

B)
Time period affiliates must turn over earnest money to their broker

C)
Exclusive listing where if the seller finds the buyer, no compensation is due the broker

D)
Lettering of firm name on For Sale sign in relation to affiliate’s name

E)
Exclusive listing where seller pays commission regardless of who procures the buyer

F)
Listing contract requirement

As big as or larger = D

Written and signed = F

Amount of commission = A

Exclusive-agency = C

Exclusive-right-to-sell = E

Immediately upon receipt = B

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Legal listing contracts in Tennessee can be either verbally expressed or in writing to form an agency relationship.

False

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For a listing agreement to be valid, it must have a definite termination date.

True

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Match the following: National Association of REALTORS®, Cooperation, Net, After receiving active written authorization from the property owner, Active broker’s license, Listing

A)
Owner of the Code of Ethics

B)
A personal service contract

C)
Type of listing that is illegal in Tennessee

D)
Time when a For Sale sign may be placed on a property

E)
Term that describes a listing broker agreeing to share compensation with an outside broker

F)
Requirement for a broker to receive a referral fee

National Association of REALTORS® = A

Cooperation = E

Net = C

After receiving active written authorization from the property owner = D

Active broker’s license = F

Listing = B

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Net listings are permitted in Tennessee.

FALSE

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A listing may be assigned to a different broker with the consent of all parties to the original agreement.

TRUE

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To be considered procuring cause of a sale, the broker must have started or caused a chain of events that resulted in

A)
the agency agreement.
B)
the listing.
C)
the sale.
D)
the offer.

Explanation

The answer is the sale. Procuring cause is the licensee who starts the action that results in the desired transaction.

When a consumer seeks legal advice before signing documents or contracts, agents should ALWAYS advise the consumer to

A)
sign the documents so they can be presented quickly.
B)
seek legal advice only from attorneys recommended by the agent.
C)
seek legal advice before signing.
D)
sign documents, get them presented, then have legal counsel review them.

Explanation
The answer is seek legal council before signing. Agents should always recommend that legal advice be sought before the consumer signs any real estate-related documents or contracts.

The represented party in a transaction is

A)
the facilitator.
B)
the broker.
C)
the client.
D)
the customer.

Explanation
The answer is the client. Also known as the principal, the client is the represented party in a transaction, whereas the customer is the unrepresented party.

Christopher is a licensee acting as a transaction broker in one transaction. Christopher

A)
is limited to performing a single transaction at a time.
B)
may act as a transaction broker or agent in a different transaction.
C)
must retire the license upon completion of the transaction.
D)
may not act as a transaction broker in a different transaction.

Explanation
The answer is may act as a transaction broker or agent in a different transaction. The fact that a licensee acts as a facilitator or transaction broker in one transaction has no effect on the agency or nonagency in a different transaction.

A licensee may place the firm’s For Sale sign on a property after

A)
preparing a CMA for an owner.
B)
initial contact with a prospective seller.
C)
another firm's listing expires.
D)
obtaining a written authorization.

Explanation
The answer is obtaining a written authorization. Active written authorization from the owner must be obtained in order for a licensee to place a For Sale sign on a property.

Because the management agreement creates an agency, Tennessee law requires that it be

A)
in writing.
B)
at least 10 pages in length.
C)
structured with topics in alphabetical order.
D)
verbal.

Explanation
The answer is in writing. Management agreements, as do listing and buyer agency agreements, create agencies and must be in writing.

At closing, the broker may be compensated by

A)
the buyer only.
B)
the title company.
C)
the seller only.
D)
both the buyer and seller.

Explanation
The answer is both the buyer and seller. The broker may receive compensation from more than one party in a transaction with everyone’s written informed consent.

A broker in another state is NOT entitled to a referral fee from a Tennessee broker if

A)
the broker’s license is active.
B)
the broker came to Tennessee and got involved in the negotiations.
C)
the referral came from one of the broker’s affiliates.
D)
the Tennessee broker promised a referral fee.

Explanation
The answer is the broker came to Tennessee and got involved in the negotiations. Unless the licensee in another state is also licensed in Tennessee, the licensee may not come into this state and get involved in the negotiations.

When may a listing be assigned to a new broker?

A)
When an agreement is signed by all parties
B)
When the agreement expires
C)
When the owner dies
D)
When the broker dies

Explanation
The answer is when an agreement signed by all parties. The listing agreement is a personal service contract and may not be assigned, sold, or otherwise transferred to another designated broker without the express written consent of all the parties to the original agreement.

A management agreement is between the broker and ``` A) an owner who wishes to lease his property. B) a broker of a different firm. C) a tenant. D) an affiliate broker. ```

Explanation The answer is an owner who wishes to lease his property. The management agreement allows the broker to represent the owner in physical, financial, and administrative management.

Specific assistance is A) confidential information given to an agent by a client. B) information that can always be disclosed. C) extra help provided by a licensed assistant. D) extra help provided by an unlicensed assistant.

Explanation The answer is confidential information given to an agent by a client. Specific assistance is information that is considered confidential because it assists the seller or buyer in negotiating.

On a For Sale sign of a listing firm, lettering must be the same size or larger than ``` A) the affiliate's name. B) the phone number. C) the logo. D) the address. ```

Explanation The answer is the affiliate's name. Though other forms of advertising might allow the affiliate's name to be bigger than the firm name, TREC mandates that the firm name must always be as big as or larger than the affiliate's name on the For Sale sign.

A type of listing that is illegal in Tennessee is ``` A) exclusive-agency listing. B) net listing. C) open listing. D) option listing. ```

Explanation The answer is net listing. A net listing is an agreement that specifies a net sale price to be received by the owner with the excess over that price to be received by the broker as commission.

The fiduciary duty that requires the agent to place the client's interest above all others is ``` A) disclosure. B) obedience. C) loyalty. D) care. ```

Explanation The answer is loyalty. The fiduciary duty of loyalty requires that the agent place the client's interest above all others, including the agent's own personal interest.

When a customer is involved in a real estate transaction, the Confirmation of Agency, a form used in Tennessee to disclose agency, ``` A) creates a designated agency. B) creates an agency. C) acknowledges that no agency exists. D) acknowledges that an agency exists. ```

Explanation The answer is acknowledges that no agency exists. The disclosure is simply an acknowledgment that no agency brokerage relationship exists between the customer and the brokerage company.

Should an affiliate broker terminate the contractual relationship with a broker and transfer to another broker, unless there is an agreement to the contrary, listings secured by the affiliate broker will ``` A) remain with the listing broker. B) expire at expiration date with no possibility of extension. C) terminate. D) transfer to the new broker. ```

Explanation The answer is remain with the listing broker. In the absence of an agreement to assign the listings to the new broker, the listings remain with the listing broker.

After a listing expires or terminates, the agent continues to owe to the client the obligations of ``` A) loyalty and obedience. B) care and confidentiality. C) confidentiality and accounting. D) obedience and disclosure. ```

Explanation The answer is confidentiality and accounting. Accounting means the agent is responsible for all funds entrusted to the agent; confidentiality extends to any information that the party would reasonably expect to be held in confidence. Of course, such information may be passed on if the party has authorized such disclosure.

A licensee appointed by the licensee's managing broker to be the firm's representative to a client, to the exclusion of any other licensee associated with the firm, is ``` A) a dual agent. B) a designated agent. C) a direct agent. D) a subagent. ```

Explanation The answer is a designated agent. One can only become a designated agent by being appointed as such by the managing broker. It relieves the broker of representation but not responsibility for the real estate actions of the affiliate.

Tennessee law requires that agency disclosure be made to ``` A) the represented party. B) the commission. C) the broker. D) the unrepresented party. ```

Explanation The answer is the unrepresented party. The first disclosure is verbal. Written disclosure must be made prior to the preparation of an offer and prior to the presentation of the offer.

Any party to a transaction other than the client is ``` A) the facilitator. B) the agent. C) the subagent. D) the customer. ```

Explanation The answer is the customer. The customer is the unrepresented party in a transaction whom the licensee works with but not for.

After a listing expires or terminates, what obligations does the agent continue to owe to the client? ``` A) Care and confidentiality B) Loyalty and obedience C) Obedience and disclosure D) Confidentiality and accounting ```