Law of Agency Final Exam Review 2023 with complete solution

Law of Agency Final Exam Review 2023 with complete solution 1. Price-fixing, boycotting, and allocating customers or markets are activities MOST relating to real estate brokerage violations of the a. federal antitrust laws. b. Real Estate Settlement Procedures Act. c. Texas Deceptive Trade Practices Act. d. Texas Real Estate License Act. A 2. During a listing presentation, the prospective seller asked the salesperson if his company's listing fee was standard in the area. Which of the following is the salesperson's BEST answer? a. "Yes, most firms charge the same." b. "Firms that charge less are not reputable and give very poor service." c. "Our firm bases its fees on the services we provide." d. "We charge the minimum allowable listing fee in this area." C 3. Errors and omissions insurance generally covers a broker and her associates for a. any judgments incurred for intentional violations of the TRELA. b. errors and mistakes made in common listing and selling activities. c. the trebling of damages under the Texas Deceptive Trade Practices Act. d. personal injury liability and casualty occurring in the broker's office. B 4. A broker at a listing appointment, before signing the listing contract, decides she would like to purchase property for her own use. In this case the broker must advise the seller of all the following EXCEPT a. that the offered price may not reflect market value. b. that the agent is acting as a principal. c. that the agent can act as an intermediary for the seller. d. to have an independent fee appraisal of the property. C 5. When presenting an offer to a listing agent on behalf of a buyer, the buyer's agent must NOT a. withhold information from the seller's agent that the buyer is willing to pay more. b. fail to include a copy of the agent's buyer representation agreement with the offer. c. fail to include a signed copy of the IABS with the offer. d. indicate that the buyer is willing to pay more than the offer being made. D 6. The nonexclusive single-agency broker would have an office policy allowing representation of each of these consumers in a transaction EXCEPT a. the buyer or the seller. b. both the seller and the buyer. c. the tenant or the landlord. d. the vendor or the vendee. B 7. A listing broker need NOT disclose a. that a murder occurred on the premises. b. that a registered sex offender resides next door. c. the lack of installed, working smoke detectors on the premises. d. that the property is in the 100-year flood plain. B 8. TRELA prohibits a licensee from a. using her expertise to the disadvantage of a person with whom the licensee deals. b. ever using any contract except TREC-approved forms. c. entering into a strictly oral agency agreement. d. entering into any form of dual representation agreements. A 9. A one-time showing agreement allows terms of the agreement to apply to a. any buyer. b. any agent. c. a specific agent only. d. a specific buyer only. D 10. With all proper disclosures having been made, intermediary status will occur if the buyer- client chooses to a. make an offer on his broker's listing. b. work directly with the firm's primary broker. c. make an offer on another firm's listing. d. make an offer on a for-sale-by-owner property. A 11. Which act could NOT lead to the suspension or revocation of a real estate license? a. Failure to make clear, to all parties of a transaction, for which party the licensee is acting b. Deliberately withholding information from a buyer-client that the seller has AIDS c. Collecting a referral fee from a carpet installer without the seller-client's consent d. Guaranteeing future profit on the sale of a property B 12. A licensee who represents a principal in a proposed real estate transaction must disclose that representation a. orally or in writing, whenever first coming into contact with the other party to the transaction. b. sometime between the time the offer to purchase is accepted and closing. c. in writing, at least by the time the offer to purchase is presented. d. in writing, at the time of the first contact with another licensee representing the other party. A 13. The initial meeting with a prospective buyer or seller in a brokerage office that practices nonexclusive single agency is BEST described as the a. buyer or the seller signs the listing agreement. b. broker receives an advance nonrefundable retainer fee. c. broker counsels the buyer or the seller. d. buyer or the seller consults the broker. C 14. In an intermediary transaction, which of these statements FALSE? a. The broker may disclose confidential information. b. The broker is an agent of the buyer. c. The broker is an agent of the seller. d. The broker must remain impartial. A 15. The rules of TREC are found in the a. Texas Trade Practices Act. b. Texas Occupation Code. c. Texas Administrative Code. d. Texas Probate Code. C 16. The parties to the buyer representation agreement are a. the sales agent and the buyer. b. the seller and the buyer. c. the sales agent, broker and the buyer. d. the broker and the buyer. D 17. An agency created by the parties' actions is known as a. ratified agency. b. dual agency. c. simple agency. d. implied agency. D 18. In an intermediary transaction, the broker may appoint a. an associate licensee to act as attorney-in-fact on behalf of each party. b. an attorney to give advice and opinions to each party. c. a broker from another firm to represent one of the parties. d. one or more licensed associates to communicate with and carry out instruction of the parties. D 19. The underlying principle found in almost all codes of ethics established by professional organizations or corporations is a. the canons of professional ethics and conduct. b. the preamble to the U.S. Constitution. c. Christian doctrine. d. the golden rule. D 20. A broker has an office policy of nonexclusive single agency and is representing a seller in the sale of his property. A buyer comes into the office and asks for representation during negotiations for the purchase of the listed property. Given the broker's office policy, which option would be available to the broker at this point? a. Agree to represent the buyer and proceed with negotiations as an intermediary. b. Explain the office policy to the buyer and insist that he must be treated as a customer on this in-house negotiation; if the buyer insists on his need for representation, refer the buyer to another broker for representation. c. Explain to the buyer that representation is not available to him under any circumstances in this transaction. d. Revoke the listing with the seller and agree to represent the buyer. B 21. An example of a psychological stigma that might have an impact on the market value of a property would be a. child molestation occurring on the property. b. missing roof shingles. c. termite infestation. d. a cracked slab. A 22. The Texas Supreme Court has ruled that for an "as is" agreement in a contract to be effective against the purchaser, it must pass several tests, which include a. all known defects must have been disclosed by the seller. b. the "as is" agreement must stand up to all of these tests to be effective against the purchaser. c. the seller must not have obstructed the buyer's attempts to inspect the property. d. the buyer and the seller must be in relatively equal bargaining positions. B 23. Unless the consumer proves that the conduct was committed knowingly or intentionally, DTPA provides that the consumer may NOT collect for a. mental anguish. b. attorney fees. c. actual damages. d. court costs. A 24. An "unconscionable action" in the DTPA is a vague term that allows the courts to a. use their discretion in deciding cases where persons have been tricked or swindled. b. ignore previous DTPA cases in their decision.