Law of Agency

Question 1

KNOW THAT A BROKER WORKS FOR AND ON BEHALF OF

Answer 1

THE CLIENT, BUT THEY ONLY WORK WITH CUSTOMERS.

Question 2

THE INITIAL RELATIONSHIP WE HAVE WITH ALL POTENTIAL BUYERS AND SELLERS IS

Answer 2

A CUSTOMER, AND THE RELATIONSHIP DETERMINES THE LEVEL OF SERVICE THAT CAN BE PROVIDED TO THEM

Question 3

License holder

Answer 3

A person licensed by the Texas Real Estate Commission (TREC) to act as
a broker or sales agent in a real estate transaction.

Question 4

Subagent

Answer 4

A license holder not associated with the seller’s broker, but who is representing
the seller through a cooperative agreement, often through membership in a Multiple Listing Service (MLS), with the seller’s broker.

Question 5

Cooperative Broker

Answer 5

A broker selling the listing of another broker. A cooperative broker
may complete the transaction as a subagent of the listing broker or may represent the buyers under an agency agreement; he or she is also known as the other broker

Question 6

Broker license holder

Answer 6

• An individual holding a broker’s license issued by TREC. Brokers
  may act independently in conducting real estate transactions or may engage other broker
  or sales agent license holders to represent them in the conduct of their real estate business

Question 7

Sales Associate

Answer 7

A sales agent or broker license holder associated with and conducting
business as an agent of his or her sponsoring broker

Question 8

Seller’s Agent

Answer 8

A broker representing the seller in a real estate transaction, also referred to
as a Seller’s Broker, Listing Broker, or Listing Agent

Question 9

Client

Answer 9

A person, sometimes called a principal, who engages the professional advice or
services of another, called an agent, and whose interests are protected by the specific duties
and loyalties of an agency relationship. Many of these duties are outlined in a listing or buyer/tenant representation agreement

Question 10

. Customer

Answer 10

A person who receives limited brokerage services without establishing an agency relationship.

Question 11

C-R-I-P

Answer 11

Compensation, Reimbursement, Indemnification, Performance

Question 12

REIMBURSEMENT

Answer 12

THE AGENT SHOULD BE REIMBURSED BY THE PRINCIPAL FOR EXPENSES THEY HAVE INCURRED ON BEHALF OF THE PRINCIPAL

Question 13

INDEMNIFICATION

Answer 13

THE PRINCIPAL WILL PROTECT THE AGENT FROM DAMAGES OF LOSS DUE TO THE AGENT’S RELIANCE ON INFORMATION RECEIVED FROM THE PRINCIPAL

Question 14

IF THE CLIENT FAILS TO PERFORM

Answer 14

THEY MAY STILL OWE COMPENSATION TO THE BROKER IF THE BROKER PROVIDED A FULL PRICE OFFER ON THEIR PROPERTY AND IT WAS CASH WITH NO CONTENGENCIES

Question 15

The main focus of the Commission is

Answer 15

to protect the public

Question 16

O-L-D-C-A-R

Answer 16

Obedience
 Loyalty
 Disclosure
Confidentiality
Accounting
 Reasonable care

Question 17

AGENCY BY ESTOPPEL IS CREATED WHEN

Answer 17

HE AGENT IS NOT BEING PROPERLY SUPERVISED BY THE PRINCIPAL AND THE AGENT TAKES ON POWERS OR AUTHORITY THAT THEY DO NOT HAVE, AND IT CAUSES THIRD PARTIES TO BELIEVE THE AGENT HAS THESE POWERS.

Question 18

EXPRESS AUTHORITY COMES FROM

Answer 18

THE WRITTEN LISTING AGREEMENT AND THE WRITTEN BUYER REPRESENTATION AGREEMENT.

Question 19

IMPLIED AUTHORITY COMES FROM

Answer 19

WHAT IS TYPICAL OR NORMAL FOR THE MARKET AREA YOU DEAL WITH, SUCH AS WHEN YOU CAN SCHEDULE APPOINTMENTS, ETC RESIDENTIAL SHOW HOMES MORE ON WEEK-ENDS COMMERCIAL SHOW PROPERTY MAINLY DURING THE WEEK

Question 20

GENERAL AGENCY GIVES THE AGENT THE AUTHORITY TO

Answer 20

REPRESENT THE PRINCIPAL IN A PARTICULAR TYPE OF TRANSACTION OR BUSINESS.

Question 21

OBEDIENCE MEANS

Answer 21

THE AGENT IS OBLIGATED TO FOLLOW ALL LAWFUL INSTRUCTIONS OF THE CLIENT, BUT YOU WOULD NEVER FOLLOW ANY INSTRUCTION THAT WOULD VIOLATE THE LAWS OF DISCLOSURE OR FAIR HOUSING, ETC. YOU MUST TERMINATE THE RELATIONSHIP WITH THEM.

Question 22

Commingling

Answer 22

is mixing clients’ funds with

a broker’s business, operating, or personal funds, and TRELA prohibits it

Question 23

conversion

Answer 23

When a broker spends his or her client’s funds without authorization, that
broker is guilty of conversion. Both commingling and conversion are serious violations of TRELA.

Question 24

ACCOUNTING MEANS

Answer 24

YOU WILL HANDLE THE CLIENT’S MONEY WITH CARE AND MAKE SURE YOU DO NOT COMMINGLE THE CLIENT’S MONEY WITH YOUR MONEY OR WITH THE COMPANY’S MONEY.

Question 25

ALL POTENTIAL BUYERS, SELLERS, LANDLORDS AND TENANTS ARE

Answer 25

CUSTOMERS UNTIL AN AGENCY RELATIONSHIP HAS OFFICIALLY BEEN CREATED.

Question 26

THE LISTING SIDE,

Answer 26

HERE THE SELLER RETAINS THE SERVICES OF A BROKER TO HELP THEM MARKET THEIR PROPERTY

Question 27

THE SELLING SIDE

Answer 27

WHERE THE BUYER RETAINS THE SERVICES OF A BROKER TO ASSIST THEM