unit 4 Flashcards
the broker must NOT act in self-interest because of the duty of
loyalty
under the fraud in real estate and stock transactions statute
only the person making the misrepresentation of promise is liable for actual and punitive damages
can a broker arbitrarily penalize an independent contractor based on varying factors, such as the sales agent’s difficulty in
closing a deal or failure to produce paperwork in a timely fashion?
texas real estate regulations are silent on in-office compensation disputes
in order to earn a commission under the terms of the license act, a licensed broker must meet several stipulations and advise the buyer to obtain what type of insurance
title
brokers will often provide time for license holders to work “desk duty,” a period in which the desk person fields incoming calls to the brokerage and may work with callers who are not otherwise affiliated with other sales agents. may brokers assign (order) sales agents to work specific hours of desk duty?
brokers may assign desk duty hours to employees, but may negotiate contracts with independent contractors that include desk duty expectations.
a broker may act as an intermediary
with the written consent of each party to the transaction
is a suicide on the property required to be disclosure by the seller
no
when a property is listed for sale, an agency relationship is created between
the listing sales agent and the seller
whose responsibility is it to disclosure to the buyer how long the property has been listed?
buyer’s agent
a seller has accepted an offer from a ready, willing, and able buyer, and the real estate agent is anticipating the closing of the transaction and receiving a commission. however, if the transaction does not close, the broker still would receive a commission under which circumstances?
failure of the owner’s spouse to sign the deed
that people buy at their own risk and should examine the property before they buy is expressed by the concept of
caveat emptor
which duty owed to the agent by the principal consists of furnishing accurate information when requested by the broker?
information
a broker who represents a seller knows that the house has structural defects that will need expensive repairs but does NOT tell prospective buyers this is an example of
fraud
why is understanding and being able to explain “agency” an important element in a license holder’s professional life?
because unhappy real estate clients and customers often contend they did not understand the legal relationship between themselves and “their agent”
are violations of antitrust laws considered civil violations or criminal violations?
both
inside a brokerage office, if all the independent contractor sales agents are on the same commission split, is this price-fixing?
no, each real estate brokerage has its own policies regarding sales agent compensation and has the right to fix those amounts.
it is customary to make the commission payable
when the seller delivers the deed
is a license holder entitled to stop a transaction (refuse to close) if he or she believes either the seller or buyer will be unable to fulfill the compensation clause in the contract?
no, the license holders must permit the transaction to close and litigate compensation after the fact
if a sales agent is working with sellers and makes a mistake in a transaction, in theory the party responsible for the mistake is
usually the sales agent’s sponsoring broker
which covers innocent misrepresentations as well as unfulfilled promises?
statutory fraud
if the largest brokerage in a community decides to offer different competitors varying levels of commission splits or fees, is that considered boycotting or price-fixing?
no, brokers are entitled and encouraged to make business decisions regarding how they will compensate various competitors
the DTPA does NOT apply to transactions that exceed $100,000 where there is a written contract and the consumer is represented by legal counsel, EXCEPT for which type of property?
Residential
if a broker permits a sponsored sales agent to conduct activities beyond the authorized scope, the broker is not responsible for those unauthorized activities. (T/F)
false
while showing properties to a potential buyer who has not signed a buyer representation agreement, the real estate agent refers to the buyers as her “clients” and recommends that they offer purchase prices that are less than listing prices. when presenting an offer to the seller’s agent, she does more for the house than they have offered. the agency relationship created in this instance is
an implied agency
if a sales agent leaves one company and becomes a sales agent for another firm, and that sales firm soon adopts the pricing, commission structure, and business practices of the first company, is that a violation of antitrust laws?
probably not
may sales agents who work for competing companies, but in the same tier of property values, share information with each other about properties that are either new on the market or about to be brought to market?
sales agents may form loose networks with each other as long as price-fixing does not take place, fair housing laws are not violated, and sales agents from outside the confederation also are allowed to present buyers.
an unlicensed assistant may
handle correspondence for a licensed agent
a listing agreement between the seller and the broker creates
a qualified agency
the subject of real estate comes up at a community social event and an individual begins asking a license holder specific questions (price, condition, square footage) about a neighborhood home for sale. would that conversation trigger a disclosure?
probably not, but if the conversation led to a follow-up phone call, email or personal conversation a disclosure would be appropriate.
recovery under the DTPA for an act committed knowingly is limited to
economic plus mental anguish damages
is the sponsoring broker liable for the unauthorized acts of an independent contractor?
no, in most cases independent contractors are solely responsible for their unauthorized acts.
a broker can control what licensed associates do but not how they will do it if the associates have the status of
independent contractors
can a sponsoring broker monitor a licensed employee’s progress in continuing education and instruct that employee when to take classes and what classes to take?
a sponsoring broker has the authority to instruct an employee when to take classes and which classes to take
if a sponsoring broker suggests that an independent contractor violate rules - such as altering or backdating a property disclosure form - who is liable?
both the sponsoring broker and the independent contractor would be held liable for the infraction.
the practice of unfairly excluding brokers from real estate professional associations or withholding patronage from other businesses is known as
boycotting the competition
can a buyer broker accept both a portion of a commission split from the listing broker and a fee from the buyer client?
yes, if the buyer agent agreement calls for a fee to be paid, and the listing agreement also calls for a commission split, the buyer broker may collect from both sides of the transaction
in addition to proportionate responsibility for damages under the DTPA, a defendant may be held jointly and separately responsible for all damages recoverable if the defendant’s percentage of responsibility is found to be more than what percentage?
50
a sales agent working for a buyer collects a commission from
the listing broker receiving the commission from the seller
if all the franchise offices in a community - each one independently owned but all under the same franchise flag - agree on how they will compensate each other, is that considered price-fixing?
yes, anytime independent brokerages agree to set fees between themselves, it is considered price-fixing
who is the principal in a typical real estate transaction?
either the buyer or the seller of the property
the purpose of antitrust laws is
to prevent a company or companies from joining together block competitors form entering the market while simultaneously agreeing how much to charge consumers
is a real estate consumer, a seller, for instance, allowed to withhold the payment of a commission if the home “sells too quickly,” suggesting “the agent priced it too low” ?
no, listing agents do not “set the price” on a home, but only consult with sellers who make the final decision
if an independent contractor announces her “farm” will henceforth be the country club crowd, can the sponsoring broker redirect her if someone else in the office already is working the country club scene?
no, the broker may discuss the difficulties of breaking into the other agent’s farm but could not otherwise order the agent to work elsewhere
a broker who acts as a subagent represents
the buyer
when the texas IABS is delivered, the sales agent or the broker should
ask for a verbal or confirming email that the consumer has received it
are real estate fees and commissions negotiable?
yes, a broker’s commission is negotiable, although a broker has no obligation to negotiate
if a large vicious dog is in residence next to a property listed for sale, should the seller list the presence of the dog as a property defect?
no, the dog does not relate to the condition of the property
if a homeowner who has NOT hired a broker agrees to accept an offer brought to him by a broker, he may create
an agency by ratification
a broker who lists the property for sale or lease represents the owner as
a seller’s agent
an unlicensed assistant may NOT
solicit prospects or listings for a licensed agent
if a broker obtains a listing agreement and counsels the seller on matters such as the right price and home preparation, can that broker than claim neutrality if a buyer approaches the broker later with an interest in the property?
yes, if the brokerage is large enough, the broker may appoint two associates, one to represent the buyer and one to represent the seller, who may then counsel those principals.
an attorney who is NOT licensed by the Texas Real Estate Commission (TREC) but performs brokerage services in a transaction may
not receive part of a broker’s commission on the sale of a property
clients who have signed listing agreements may “fire” their broker. is a broker permitted to fire a client
yes, a broker may fire a client
when a seller, on the advice of the listing agent, reduces the price of the home, are potential buyers entitled to know why?
no, the listing agent is not obligated to volunteer why there has been a price reduction
the brokers in a certain area meet and agree that some brokers will handle residential property under $100,000, others will handle residential property over $100,000, others will handle commercial property, and others will sell condominiums. this is an example of
market allocation
is the sponsoring broker liable for the unauthorized misdeeds of a licensed employee?
yes, the chain of liability goes all the way up from the employee to the broker, to the owner of the company
in a real estate brokerage company, who needs to understand the Texas law of agency?
everyone in the office who has a real estate license
the license holder is required to furnish a written statement providing general information concerning agency positions under what?
the license holder has a substantive dialogue with a buyer
because licensed associates (sales agents) are agents of the broker, they should have which with the broker?
written agreement
