Creation and Termination of Agency

Question 1

Explain an agency relationship

Answer 1

Agency is a relationship in which a person from the public now has a licensed broker and the broker’s salespeople to assist the client in accomplishing either selling a property, buying a property, or leasing a property.

Question 2

When does a customer become a client?

Answer 2

When the customer signs an agency agreement with the broker.

Question 3

If a licensee accidentally discloses confidential information to a customer, this type of agency is termed what?

Answer 3

Implication of Agency

Question 4

What is the most desirable type of listing to have?

Answer 4

Exclusive right to sell

Question 5

Exclusive Agency is usually used when?

Answer 5

When the seller wants to reserve certain names to sell the property to without the help of the broker

Question 6

How many brokers can a seller give an open listing to?

Answer 6

As many as the seller wants

Question 7

A buyer that would rather remain a customer rather than become a client is doing so for what reason?

Answer 7

To be able to leave one broker and go to another without having any relationship created between them

Question 8

What is the minimum number of disclosures required whether working for a buyer-client or seller-client?

Answer 8

Three

Question 9

It’s always the goal of the licensee to meet the needs of whom?`

Answer 9

The Client

Question 10

What is the best way to end agency?

Answer 10

By successfully closing the deal

Question 11

Generally, is it possible to collect a commission after the listing expires?

Answer 11

After the listing expires, if no extension is given, the listing broker would not be able to collect a commission

Question 12

When is the only situation in which a reasonable time decision will have to be made?

Answer 12

When the agreement was verbal rather than in writing

Question 13

What might sellers do if they are not happy with the progress the agent is making in showing and selling their home?

Answer 13

They can request the listing be revoked.

Question 14

What can a broker do during an agency agreement if the client wants to continue the agreement, but the broker does not?

Answer 14

The broker can cancel the agency agreement, but must have good cause to do so.

Question 15

With the death of the owner, what happens to the listing agreement?

Answer 15

It dies as well, canceling the agency agreement

Question 16

List five ways agency can terminate.

Answer 16

Broker Failure
Bankruptcy of the Seller
Foreclosure of the Property
Property is Destroyed
Incompetence of Broker or Client

Question 17

The types of confidences that an agent would have would be things like

Answer 17

Why the seller is selling
Lowest price the seller will take
Highest price the buyer will offer
A family divorce
A lost job
A pending foreclosure
A previous offer that did not become a contract
What the buyer would spend on additional properties

Question 18

The one fiduciary duty that continues beyond the agency relationship is what?

Answer 18

Confidentiality

Question 19

Courts have ruled that if the client wrongfully terminates the agency, what may happen?

Answer 19

The client may be liable for the damages caused to the broker because the agency was ended before the termination date.

Question 20

How much time notice is required when a licensee decides to leave his or her broker?

Answer 20

There is no notice required.

Question 21

What could happen if there is a change in zoning for an office’s geographical coverage area?

Answer 21

The broker’s office policy may not allow the salesperson to re-list the property under its new status.

Question 22

The responsibility of taking care of the needs of the client

Answer 22

fall upon the broker even though a salesperson in the office may be the one in direct communication with the client. If the salesperson falters, the broker needs to pick up the slack. If the salesperson needs assistance, it should be provided by the broker.

Question 23

The best way to create agency

Answer 23

is in writing, rather than implying agency.

Question 24

An exclusive right to sell

Answer 24

is the most desirable listing to have. Under this agreement, it does not matter who sells the property. As long as the property sells during the time that the broker had the listing, the seller should pay the broker the commission.

Question 25

The seller can give an open listing

Answer 25

to as many brokers as they can get to take it.

Question 26

Buyer’s Rep Agreement

Answer 26

is written in such a way that the buyer is exclusively represented by one broker and is not to enter into another agreement with another broker`

Question 27

There should never be undisclosed agency

Answer 27

Each licensee should always know who he or she is representing and be comfortable telling licensees and customers about that representation.

Question 28

three disclosures that should take place when creating agency with a client whether that client is a seller or a buyer.

Answer 28

The licensee should explain what the company policy is concerning cooperating with other brokers
The client should also know where the commission is coming from
Each client should have it explained to them that the broker could wind up representing both the buyer and the seller

Question 29

The best way to end agency is to close the deal

Answer 29

This would be done by getting a suitable price and terms for the seller and by finding a suitable property for the buyer.

Question 30

Recission

Answer 30

is when both the client and the broker agree to end the relationship that they are in.

Question 31

There is no form

Answer 31

to end the relationship that a salesperson has with the broker. The normal way that the independent contractor relationship ends is that the licensee lets the broker know to send his or her license back to the Texas Real Estate Commission.