Summary Champions Real Estate Exam: Law of Agency
Exam review guide_2022/2023.
his person hires an agent
The Principal
The agent works on behalf of this person
the client (principal)
This type of agency allows for the greatest range of authority
Universal
This is provided to the agent when there is written documentation that the agency
relationship exists.
Express authority
This is the most limited of all the agency relationships
Special agency
This type of agency is created when a 3rd party believes that an agent has authority that
has NOT been granted by a principal
Agency by Estoppel
This type of agency is created when actions lead another person to assume that one is an
agent (Example- you have a key to neighbors home and show the property)
Ostensible Agency
If a buyer hasn't signed a buyer's rep agreement, then who is representing the buyer?
No one
This establishes a relationship with a broker
The Buyer/Tenant Representation agreement
This can be written or oral
Disclosure of Representation
These are required to place their own selfish interests behind that of their clients.
Fiduciaries
A licensee isn't required to provide the IABS when...
the licensee meets with a party that is already represented
A broker is obligated to treat who honestly?
client, customer, and agents
Broker must have written consent to act as...
an intermediary
IABS form is the property of...
TREC
Broker Bob is the broker/owner of ABC Realty. Agent Bill at ABC Realty is a listing agent.
Agent Sue, also at ABC Realty, is working with a buyer who is being represented by the
,firm. Agent Sue's buyer wants to purchase Agent Bill's listing
In the above transaction, Broker Bob will:
Remain neutral and refrain from providing advice and opinion to either party
The IABS should contain
How the broker will be compensated
Broker Steve, having no agents, is a solo practitioner. He has a client buyer that wants to
purchase one of his listings. The process that Broker Steve must use is:
Intermediary without appointments
A fiduciary relationship is based on
trust
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not enter
into an
agency relationship with City Realty.
In the above transaction, who is representing the buyer?
No body because the buyer is a customer.
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not enter
into an
agency relationship with City Realty.
In the above transaction, who is City Realty representing?
The seller, because City Realty is a subagent of ABC Realty in this transaction
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not enter
into an
agency relationship with City Realty.
What type of transaction is this?
cooperative (co-op)
An exemption to using the Information About Brokerage Services form is:
a lease for less than 1 year with no sale anticipated
A licensee not associated with the client's broker but who is representing the client through
a
cooperative agreement with the client's broker is known as:
Subagent
This must be in at least 10 point type, must have the exact language prescribed in the
License Act
and must be provided to a buyer or seller at the first substantive discussion of a real estate
transaction
IABS (Information About Brokerage Services)
,Jeffrey wants to see property that your company has listed; he does not want to be
represented.
The agent must:
give Jeffrey the IABS form
A licensee must present the Information About Brokerage Services form:
at the first substantive discussion of a real estate transaction
A licensee has a listing with a seller and has a buyer's representation agreement signed
with a
buyer who desires to purchase this agent's listing. How is the agent operating?
as a non-appointed associate in an Intermediary relationship
TREC was established in:
1949
Which of the following is the real estate licensing authority in Texas?
TREC
A termination date in a listing agreement must be:
definite
Which of the following is NOT an agent's duty to a client?
Trust
These are the duties: OLDCAR: Obedience, loyalty, disclosure, confidentiality, accounting,
reasonable care
The duty of ___________ means that an agent must follow all of the lawful instructions of
the client.
obedience
Jerome is a licensed agent who desires to sell his mother's home. Jerome has the property
listed with his brokerage firm and finds a buyer himself to buy mom's home. Jerome
should:
Disclose to the buyer in writing that the seller is his mother.
If an agent sells their own property, acting as a principal, the agent must:
disclose to the party in writing that they are a licensed agent
Confidential information between client and agent should be:
kept confidential forever
In most states other than Texas, the most common method of dealing with in-house
transactions between client buyers and sellers is:
dual agency
When handling escrow funds for clients, the License Act requires that funds be deposited
in
a "reasonable time". A reasonable time is defined as:
2 business days
The listing agreement should contain:
the legal description of the property
Which of the following are elements of a listing?
, the terms of sale, such as the sales price and financing terms acceptable to the seller.
Sam listed his property with three different real estate brokers. In each agreement he
reserved
the right to sell the property himself without paying a commission. The type of listing that
Sam signed with each broker was an:
open listing
Data used for a CMA should be no older than:
6 months
The report used to give a seller or buyer an indication of market value is called:
Comparative Market Analysis
Listings may be terminated by:
death, either party - broker or client, or mutual agreement
Listings are the property of the:
broker
Duties of principal to agent
CRIP: Compensation, Reimbursement, Indemnification (protect the agent from suffering a loss
due to the
agent's reliance in information received from the principal), Performance
If a broker dies what happens to the listing with the seller?
it automatically terminates
If a broker sells a property on behalf of a seller without a signed listing agreement, the
courts
will most likely declare that the broker is:
a volunteer, an agent in a listing agreement that is unenforceable against the seller, and unable to
enforce payment of the commission
Commission rates are set by?
client and broker
The TAR® Buyer Representation Agreement in our textbook:
authorizes Intermediary, is limited to the market area designated in the agreement and authorizes
the agent to show properties to competing buyers
If a broker's agents are independent contractors, there can be a policies and procedures
manual
for the agents, however,
the broker can not require mandatory compliance
A real estate agent generally gets paid:
commission
Your company sends out a memo that there is a mandatory sales meeting this week for the
sales agents.
The IRS rule on independent contractor status could be violated.
In Texas, Workman's Compensation must be paid for real estate agents by brokers. TRUE
OR FALSE
Exam review guide_2022/2023.
his person hires an agent
The Principal
The agent works on behalf of this person
the client (principal)
This type of agency allows for the greatest range of authority
Universal
This is provided to the agent when there is written documentation that the agency
relationship exists.
Express authority
This is the most limited of all the agency relationships
Special agency
This type of agency is created when a 3rd party believes that an agent has authority that
has NOT been granted by a principal
Agency by Estoppel
This type of agency is created when actions lead another person to assume that one is an
agent (Example- you have a key to neighbors home and show the property)
Ostensible Agency
If a buyer hasn't signed a buyer's rep agreement, then who is representing the buyer?
No one
This establishes a relationship with a broker
The Buyer/Tenant Representation agreement
This can be written or oral
Disclosure of Representation
These are required to place their own selfish interests behind that of their clients.
Fiduciaries
A licensee isn't required to provide the IABS when...
the licensee meets with a party that is already represented
A broker is obligated to treat who honestly?
client, customer, and agents
Broker must have written consent to act as...
an intermediary
IABS form is the property of...
TREC
Broker Bob is the broker/owner of ABC Realty. Agent Bill at ABC Realty is a listing agent.
Agent Sue, also at ABC Realty, is working with a buyer who is being represented by the
,firm. Agent Sue's buyer wants to purchase Agent Bill's listing
In the above transaction, Broker Bob will:
Remain neutral and refrain from providing advice and opinion to either party
The IABS should contain
How the broker will be compensated
Broker Steve, having no agents, is a solo practitioner. He has a client buyer that wants to
purchase one of his listings. The process that Broker Steve must use is:
Intermediary without appointments
A fiduciary relationship is based on
trust
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not enter
into an
agency relationship with City Realty.
In the above transaction, who is representing the buyer?
No body because the buyer is a customer.
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not enter
into an
agency relationship with City Realty.
In the above transaction, who is City Realty representing?
The seller, because City Realty is a subagent of ABC Realty in this transaction
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not enter
into an
agency relationship with City Realty.
What type of transaction is this?
cooperative (co-op)
An exemption to using the Information About Brokerage Services form is:
a lease for less than 1 year with no sale anticipated
A licensee not associated with the client's broker but who is representing the client through
a
cooperative agreement with the client's broker is known as:
Subagent
This must be in at least 10 point type, must have the exact language prescribed in the
License Act
and must be provided to a buyer or seller at the first substantive discussion of a real estate
transaction
IABS (Information About Brokerage Services)
,Jeffrey wants to see property that your company has listed; he does not want to be
represented.
The agent must:
give Jeffrey the IABS form
A licensee must present the Information About Brokerage Services form:
at the first substantive discussion of a real estate transaction
A licensee has a listing with a seller and has a buyer's representation agreement signed
with a
buyer who desires to purchase this agent's listing. How is the agent operating?
as a non-appointed associate in an Intermediary relationship
TREC was established in:
1949
Which of the following is the real estate licensing authority in Texas?
TREC
A termination date in a listing agreement must be:
definite
Which of the following is NOT an agent's duty to a client?
Trust
These are the duties: OLDCAR: Obedience, loyalty, disclosure, confidentiality, accounting,
reasonable care
The duty of ___________ means that an agent must follow all of the lawful instructions of
the client.
obedience
Jerome is a licensed agent who desires to sell his mother's home. Jerome has the property
listed with his brokerage firm and finds a buyer himself to buy mom's home. Jerome
should:
Disclose to the buyer in writing that the seller is his mother.
If an agent sells their own property, acting as a principal, the agent must:
disclose to the party in writing that they are a licensed agent
Confidential information between client and agent should be:
kept confidential forever
In most states other than Texas, the most common method of dealing with in-house
transactions between client buyers and sellers is:
dual agency
When handling escrow funds for clients, the License Act requires that funds be deposited
in
a "reasonable time". A reasonable time is defined as:
2 business days
The listing agreement should contain:
the legal description of the property
Which of the following are elements of a listing?
, the terms of sale, such as the sales price and financing terms acceptable to the seller.
Sam listed his property with three different real estate brokers. In each agreement he
reserved
the right to sell the property himself without paying a commission. The type of listing that
Sam signed with each broker was an:
open listing
Data used for a CMA should be no older than:
6 months
The report used to give a seller or buyer an indication of market value is called:
Comparative Market Analysis
Listings may be terminated by:
death, either party - broker or client, or mutual agreement
Listings are the property of the:
broker
Duties of principal to agent
CRIP: Compensation, Reimbursement, Indemnification (protect the agent from suffering a loss
due to the
agent's reliance in information received from the principal), Performance
If a broker dies what happens to the listing with the seller?
it automatically terminates
If a broker sells a property on behalf of a seller without a signed listing agreement, the
courts
will most likely declare that the broker is:
a volunteer, an agent in a listing agreement that is unenforceable against the seller, and unable to
enforce payment of the commission
Commission rates are set by?
client and broker
The TAR® Buyer Representation Agreement in our textbook:
authorizes Intermediary, is limited to the market area designated in the agreement and authorizes
the agent to show properties to competing buyers
If a broker's agents are independent contractors, there can be a policies and procedures
manual
for the agents, however,
the broker can not require mandatory compliance
A real estate agent generally gets paid:
commission
Your company sends out a memo that there is a mandatory sales meeting this week for the
sales agents.
The IRS rule on independent contractor status could be violated.
In Texas, Workman's Compensation must be paid for real estate agents by brokers. TRUE
OR FALSE
