Law of Agency Final Exam Review 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.
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.
