Download ACEABLE Law of Agency Review Exam: Questions and Answers for Real Estate Professionals and more Exams Law in PDF only on Docsity!
ACEABLE LAW OF AGENCY REVIEW EXAM
WITH CORRECT ACTUAL QUESTIONS AND
CORRECTLY WELL DEFINED ANSWERS
LATEST ALREADY GRADED A+
A fiduciary duty that never terminates is - ANSWERS-the duty of confidentiality and the duty of accounting
The Four D's of Disclosure - ANSWERS-Decide whom they represent
Disclose to all parties whom they represent
Document that sufficient disclosure was made in a timely manner
Do your duties based on the representation and disclosures you have made
TREC - ANSWERS-the body that oversees and enforces the statutes and rules that dictate industry disclosure policy and the mandate for brokers to have written company policies for their brokerages.
(TRELA) The Real Estate License Act - ANSWERS-provides the statutory guidelines stipulating the duties of disclosure of license holder agency relationships.
consensual relationship - ANSWERS-between a broker and a client.
The subagent must take care to disclose to the buyer that - ANSWERS-there is no agency agreement between them
that the subagent is working in the best interests of the - ANSWERS-seller
independent contractors - ANSWERS-The vast majority of real estate sales agents operate as
he Independent Contractor Agreement - ANSWERS-as the initial employment contract for sponsorship by the broker
The Statement of Understanding - ANSWERS-that is to be signed every year after the original contract takes effect
Sales agent: - ANSWERS-An individual holding a sales agent license from TREC who is sponsored by a broker
License holder - ANSWERS-A broker or a sales agent licensed by TREC
Client (principal) - ANSWERS-Anyone who has an agency relationship with you or your broker is your client
Customer - ANSWERS-A party to the transaction who has an agency relationship with another license holder
Third Party - ANSWERS-All non-client parties to a transaction, including real estate professionals
Here are the four major types of agency acts: - ANSWERS-Listing
Buying
Leasing
Property Management
TREC's purpose is to - ANSWERS-regulate educational and licensing programs that maintain standards AND interpret legislation that affects the real estate profession — primarily the Texas Real Estate License Act (TRELA).
Integrity - ANSWERS-Satisfy to the commission (TREC) that the candidate meets and exceeds their character standards (honesty, trustworthiness, and integrity).
Competence - ANSWERS-Demonstrate competence by passing the licensing exam.
Broker: - ANSWERS-An individual licensed by TREC to perform brokerage duties; sponsors sales agents to represent clients on their behalf
Types of Principles: - ANSWERS-Seller: Party seeking to sell their property in a real estate transaction
Buyer: Party seeking to buy property in a real estate transaction
Tenant: Party who occupies land or property rented from a landlord
Landlord: Party who rents land or property to a tenant
Client Vs Customer: - ANSWERS-A broker/agent works for a client.
A broker/agent works with a customer.
Agency relationships require the consent of both parties (client and agent), which can be demonstrated by one of three methods: - ANSWERS-Written agreement
Oral agreement
Action
Ostensible agency - ANSWERS-occurs when a principal allows a license holder to act in such a way as to cause a third party to believe that the license holder is the principal's agent.
Agency by estoppel - ANSWERS-is agency imposed by law when it is determined that ostensible agency existed.
occurs in an environment of ostensible agency.
Special Agency (Limited Agency) - ANSWERS-(broker-client)
the most limited type of agency relationship.
unable to make decisions that may bind or obligate their principals.
all sponsored sales agents in that brokerage also owe that client fiduciary duties.
General Agency - ANSWERS-(sales agent-broker)
most common type of agency between brokers and their sales agent
Gives agents more power AND
Holds the principal (broker) responsible for actions performed by their agent
Principal: The broker is the principal of the agent.
Agent: The sales agent is the agent of the broker.
help the broker fulfill their fiduciary duties to their clients
Universal Agency - ANSWERS-(child-parent as executor of will)
most broad type of agency
general power of attorney:
agent has the actual power to sign legal documents on behalf of their principal.
the duty of obedience does not apply if - ANSWERS-the principal's instructions are illegal or unethical in any way.
The license holder must disclose who they are representing in the transaction - ANSWERS-upon first contact
Information About Brokerage Services (IABS) - ANSWERS-serves to establish broker minimum duties and to disclose the types of representation available to the parties right up front.
A listing agent can help a buyer with - ANSWERS-the process of obtaining financing
Material Fact - ANSWERS-A fact that could possibly persuade a buyer or seller to change their decision if they knew about it as opposed to a trivial fact.
license holders must disclose: - ANSWERS-all KNOWN information
disclosures that are required - ANSWERS-are included in the TREC form, Seller's Disclosure Notice.
(This form is to be completed by the seller)
If the seller does not give the notice as required before signing the contract, - ANSWERS-allows the buyer to terminate the contract for any reason within seven days after receiving the notice or before closing, whichever is earlier.
A defect - ANSWERS-item that was installed or is attached to the home and has an imperfection.
a malfunction - ANSWERS-something is designed or built to perform a certain function and no longer does so.
Permitted disclosures - ANSWERS-disclosures that are not required, but also not forbidden.
(death on a property does NOT have to be disclosed if it was from natural causes, an accident unrelated to the property, or suicide.)
unlawful disclosures, - ANSWERS-disclosures that you are legally forbidden from making
stigmatized property. - ANSWERS-something that happened there (murder, crime, death on property, ghosts)
the safest way to enter into an agency relationship - ANSWERS-written agreement
seller agency - ANSWERS-relationship between a real estate agent and the seller in the brokerage of homes
(established in a listing agreement)
Open Listing: - ANSWERS-Seller will pay any broker who brings a buyer who purchases the property.
right to list the property with multiple competing brokers
Do Not - ANSWERS-Write the starting date as the day that you plan to put the listing on the MLS.
Do - ANSWERS-Write the starting date as the day the sellers sign the listing agreement. (This keeps you and your broker fully covered.)
seller disclosure - ANSWERS-honestly discloses and provides buyers with all the information about any defects, hazards, or conditions in the property
unlawful for sellers to intentionally hide serious property defects
Agency Disclosure - ANSWERS-if the broker or any of the broker's agents are acting on their own behalf
whether real estate agents and brokers are licensed or have potential conflicts of interest
Everyone in the transaction is entitled to know who the agent is working for.
agent and broker duties and the responsibilities owed to the buyer
if the agent or the broker has relatives that have any personal interest in the transaction
Intermediary disclosure - ANSWERS-whether the broker is representing them exclusively
exclusive buyer agency - ANSWERS-contract with an agent agrees to being represented exclusively by that agent.
beneficial to both the buyer and the agent
protection period - ANSWERS-period of time after the buyer's representation term ends in which the agent can still get compensation for their role in a transaction.
No later than 10 days after the agreement ends
Actual agency - ANSWERS-Refers to actions an agent has been authorized (orally or in writing) to complete on behalf of a principal.
Apparent or ostensible agency - ANSWERS-When a principal allows a license holder to act in such a way as to cause a third party to believe that license holder is the principal's agent.
Agency by Ratification - ANSWERS-When the principal accepts an agent's actions after the fact, thus affirming the actions taken and creating retroactive agency.
The problem with oral agreements - ANSWERS-agent still owes the buyer all of the fiduciary duties, but the buyer owes the agent nothing
An agency relationship is created either by - ANSWERS-contract or law
(TREC does not provide such a form, but TAR does.)
Express agency - ANSWERS-when the principal explicitly instructs the broker/agent to act on their behalf.
Implied agency - ANSWERS-when a party assumes consent to the agency relationship based solely upon inferences
Unintended agency - ANSWERS-when the actions of a license holder create the impression of agency without intent on the part of the license holder
Agency by ratification - ANSWERS-agent takes an action outside of what they were explicitly authorized to do but which was accepted after the fact by the principal.
Ostensible agency - ANSWERS-actions of an agent lead a third party to believe agency exists between a principal and the agent.
Gratuitous agency - ANSWERS-a license holder enters into an agency agreement without expectation of compensation. The agent is still held to all duties of an agency relationship.
(always get permission from their broker to practice this type of agency.)
A subagent - ANSWERS-a license holder, not affiliated with the seller's broker, brings an UNREPRESENTED buyer to the transaction via a cooperative agreement with the seller's broker.
the most desirable way to terminate agency is when - ANSWERS-the purpose for that agency has been fulfilled.
Mutual Rescission - ANSWERS-when both parties mutually agree to end an agency agreement.
Revocation - ANSWERS-when the client initiates the termination
they may be liable for damages.
Renunciation - ANSWERS-when the license holder initiates the termination of the agency agreement
the agent could be liable for damages if the contract is breached.
Destruction or Condemnation - ANSWERS-termination of an agency agreement due to the extinction of the property
Abandonment - ANSWERS-when an agent ceases to perform their agency duties without notifying the principal.
The independent contractor agent will most likely be - ANSWERS-compensated by their sponsoring broker via a commission.
Ethics - ANSWERS-standards of conduct agreed upon and recognized by a particular group or culture. (external group)
Morals - ANSWERS-are the personal values derived from a system of beliefs. (internally)
Federal Fair Housing Act (or FFHA): - ANSWERS-Protects from discrimination when renting, buying, or securing financing for any housing.
Americans with Disabilities Act in 1990: - ANSWERS-Identified and defined the protected disabilities.
Truth in Lending Act (TILA): - ANSWERS-Protects consumers against inaccurate and unfair credit billing and credit card practices.
Real Estate Settlement Procedures Act (RESPA): - ANSWERS-Requires lenders to provide good faith estimates of closing and settlement costs
kickback - ANSWERS-is considered to be any money, fees, commission, credit, gift, gratuity, thing of value, or compensation of any kind for improperly obtaining or rewarding favorable treatment.
Securities and Exchange Commission (or SEC) - ANSWERS-is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.
The Sherman Antitrust Act - ANSWERS-prohibits the formation of trusts, or monopolies, in the marketplace.
Grounds for Suspension or Revocation of License - ANSWERS-Procurement of a license by fraud, misrepresentation, or deceit
Failure to surrender to an owner, without just cause, a document or instrument that is requested by the owner
Engaging in misrepresentation, dishonesty, or fraud when selling, buying, trading, or leasing real property
mediation - ANSWERS-forum before an impartial person (the mediator) used to facilitate communication between parties and to promote reconciliation, settlement or understanding.
arbitration - ANSWERS-as a forum where parties and counsel present their positions before an impartial third party who renders a specific award.
Buyer's Agent - ANSWERS-owes fiduciary duties to the Buyer
