Law of Agency Final Exam Review 2023, Complete Solution

Law of Agency Final Exam Review 2023, Complete Solution Most lawsuits involve issues of who did or did not represent whom. The number of lawsuits is: A. Increasing B. Decreasing C. Stabilizing over the last several years D. Broker lawsuits are not allowed. A. Increasing The correct answer is A. A broker is more likely to be sued because he failed to make it clear to all parties who he represented as a client. The broker working with a buyer customer and representing the seller through the seller's broker is a: A. Buyer B. Seller C. Subagent D. Intermediary C. Subagent For subagency to exist there must be two sponsoring brokers. One of the brokers has a seller client and the other broker must have a buyer customer. All parties to the transaction must be treated honestly and fairly, but a fiduciary relationship is owed to the: A. Customer B. Client C. Everyone D. No one B. Client A fiduciary relationship is a relationship of trust. The broker must always put the client's interest above the broker's interest. The TRELA does not require disclosure if a death occurred on a property: A. By natural causes B. By suicide C. In an accident unrelated to the condition of the property D. All of the above D. All of the above A murder on the property and an accidental death resulting from an accident related to a condition of the property must be disclosed. Something that affects the property or the health of the residents of the property is called a(n): A. Psychological stigma B. Exception C. Physical stigma D. None of the above C. Physical stigma A psychological stigma does not affect the physical condition of the property, but it can affect the value of the property. Information about Brokerage Services must be given to potential buyers, sellers, tenants, and landlords: A. At the time of first meeting B. After the listing is taken C. At the closing D. At the first substantive dialogue about a property D. At the first substantive dialogue about a property Information About Brokerage Services gives information concerning the ways a broker can represent a person. It gives information about buyer's agency, seller's agency, intermediary, and subagency. How many companies are required in a subagency relationship? A. 13 B. 9 C. 4 D. 2 D. 2 For subagency to exist there must be two sponsoring brokers (companies) and one of those brokers must have a buyer customer. What advice would an agent give to a seller? A. Advice about market conditions and financing options B. Advice about preparing the property for sale and negotiating contracts C. Both A and B D. None of the above C. Both A and B The agent is representing the seller as a client and owes advice and opinions to the seller. The listing broker may cooperate with the buyer's broker or a subagent. Often the commission for all brokers in the transaction is paid by the: A. Subagent B. Buyer C. Seller D. Attorney C. Seller The amount of the commission to be paid by the seller for the sale of the property is set in the listing agreement. The buyer's agent will view the transaction from the buyer's point of view and will counsel the buyer on: A. Financing the property B. Contingencies C. Negotiating strategy D. All of the above D. All of the above If the seller disclosure notice is not delivered by the effective date, the buyer has the right to cancel the contract within _________ days after receiving the notice. A. Ten B. Six C. Seven D. Four C. Seven If the buyer does not have the seller's disclosure form before he signs a contract to buy, the seller must deliver the form to the buyer after the contract is signed. The buyer has 7 days to cancel the contract after he receives the disclosure form. A defect that is known to the seller and hidden from the buyer is a: A. Material defect B. Zoning defect C. Intermediary defect D. Latent defect D. Latent defect A seller is required to disclose any known defects and must not hide them from the buyer. When a broker is working with a buyer customer, the broker can: A. Give advice B. Tell the buyer the amount to offer for the property C. Deliver the offer to the seller's broker D. Give opinions C. Deliver the offer to the seller's broker A broker working with a buyer customer is not allowed to give the buyer customer advice or opinions about the property A listing broker is not required to: A. Maintain a fixed office address B. Use Information About Brokerage Services C. Allow subagency D. Have a license issued by TREC C. Allow subagency A listing broker may allow or not allow subagency. He will make a decision for his company to pay either buyers' brokers, subagents, or both. The One to Four Residential Contract (Resale) is the form used to make an offer on a property. It becomes the contract when: A. A lawsuit affects the property. B. The buyer has signed the form. C. The offer is made to the seller. D. All parties have signed. D. All parties have signed. The offer must be signed by the buyer and seller. At this point the offer becomes a contract. When the salesperson leaves the sponsorship of the broker, the buyer's agreement: A. Remains with the broker B. Is cancelled C. Is always given to the salesperson D. Doubles in length A. Remains with the broker All listing agreements and all buyer representation agreements are taken in the name of the broker and become the property of the broker. Protection Period means: A. The house will be protected by hazard insurance. B. That time starting the day after the listing and continuing for ____ days C. The home will have a clear title. D. The property cannot be sold for ___ days after the contract is finished. B. That time starting the day after the listing and continuing for ____ days The protection period is set by the broker with the agreement of the seller. All salesperson's licenses must: A. Be kept in the salesperson's office B. Be displayed on the wall of the sales office C. Be inactive with TREC D. Be kept in the sponsoring broker's custody and control D. Be kept in the sponsoring broker's custody and control The sponsoring broker must receive the salesperson's license before the salesperson may practice real estate. Honesty and ________ are owed to the customer and all ________ and latent defects must be disclosed to the buyer customer. A. Disclosure ----- material facts B. Personal property ----- tenants C. Sellers ----- buyers D. All of the above A. Disclosure ----- material facts The seller's broker must disclose material facts to the buyer, but the seller's broker does not give the buyer advice and opinions. A broker with a buyer's representation agreement in place is more likely to show all properties that meet the needs of the buyer. The properties could include: A. For Sale by Owner B. Foreclosures C. Property not yet on the market D. All of the above D. All of the above A broker with a buyer's representation agreement will try to show all properties that fit the needs of the buyer. The broker represents the buyer as a client and will try to show the best properties to the buyer. A listing broker is considered to have earned the commission: A. When the sales contract is signed by the seller, the buyer, and the broker B. At closing and funding C. When the broker procures a ready, willing, and able buyer D. When the listing agreement expires C. When the broker procures a ready, willing, and able buyer The commission is earned when the broker procures a ready, willing, and able buyer, but the commission will not be paid until closing and funding. The listing broker agrees to pay the other broker in the: A. TRELA B. IREM agreement C. TREC sales contract D. IABS C. TREC sales contract The listing agreement states the amount to be paid to the seller's broker and the seller's broker states the amount to be paid to the buyer's broker in the sales contract. The Code of Ethics requires the buyer's agent to disclose to the seller's agent that they represent the buyer at the: A. First contact B. First face-to-face meeting