Champions Real Estate Exam: Law of Agency UPDATED Exam Questions and CORRECT Answers
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Module
Law of Agency
Institution
Law Of Agency
Champions Real Estate Exam: Law of
Agency UPDATED Exam Questions and
CORRECT Answers
This person hires an agent - Correct Answer- The Principal
The agent works on behalf of this person - Correct Answer- the client (principal)
This type of agency allows for the greatest range of authority - C...
Champions Real Estate Exam: Law of
Agency UPDATED Exam Questions and
CORRECT Answers
This person hires an agent - Correct Answer- The Principal
The agent works on behalf of this person - Correct Answer- the client (principal)
This type of agency allows for the greatest range of authority - Correct Answer- Universal
This is provided to the agent when there is written documentation that the agency relationship
exists. - Correct Answer- Express authority
This is the most limited of all the agency relationships - Correct Answer- Special agency
This type of agency is created when a 3rd party believes that an agent has authority that has
NOT been granted by a principal - Correct Answer- Agency by Estoppel
This type of agency is created when actions lead another person to assume that one is an
agent (Example- you have a key to neighbors home and show the property) - Correct Answer-
Ostensible Agency
If a buyer hasn't signed a buyer's rep agreement, then who is representing the buyer? - Correct
Answer- No one
This establishes a relationship with a broker - Correct Answer- The Buyer/Tenant
Representation agreement
This can be written or oral - Correct Answer- Disclosure of Representation
These are required to place their own selfish interests behind that of their clients. - Correct
Answer- Fiduciaries
,A licensee isn't required to provide the IABS when... - Correct Answer- the licensee meets
with a party that is already represented
A broker is obligated to treat who honestly? - Correct Answer- client, customer, and agents
Broker must have written consent to act as... - Correct Answer- an intermediary
IABS form is the property of... - Correct Answer- TREC
Broker Bob is the broker/owner of ABC Realty. Agent Bill at ABC Realty is a listing agent.
Agent Sue, also at ABC Realty, is working with a buyer who is being represented by the firm.
Agent Sue's buyer wants to purchase Agent Bill's listing
In the above transaction, Broker Bob will: - Correct Answer- Remain neutral and refrain from
providing advice and opinion to either party
The IABS should contain - Correct Answer- How the broker will be compensated
Broker Steve, having no agents, is a solo practitioner. He has a client buyer that wants to
purchase one of his listings. The process that Broker Steve must use is: - Correct Answer-
Intermediary without appointments
A fiduciary relationship is based on - Correct Answer- trust
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not enter into
an
agency relationship with City Realty.
In the above transaction, who is representing the buyer? - Correct Answer- No body because
the buyer is a customer.
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
,purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not enter into
an
agency relationship with City Realty.
In the above transaction, who is City Realty representing? - Correct Answer- The seller,
because City Realty is a subagent of ABC Realty in this transaction
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe's listing. The buyer that Agent Sean is working with has chosen to not enter into
an
agency relationship with City Realty.
What type of transaction is this? - Correct Answer- cooperative (co-op)
An exemption to using the Information About Brokerage Services form is: - Correct Answer-
a lease for less than 1 year with no sale anticipated
A licensee not associated with the client's broker but who is representing the client through a
cooperative agreement with the client's broker is known as: - Correct Answer- Subagent
This must be in at least 10 point type, must have the exact language prescribed in the License
Act
and must be provided to a buyer or seller at the first substantive discussion of a real estate
transaction - Correct Answer- IABS (Information About Brokerage Services)
Jeffrey wants to see property that your company has listed; he does not want to be
represented.
The agent must: - Correct Answer- give Jeffrey the IABS form
A licensee must present the Information About Brokerage Services form: - Correct Answer- at
the first substantive discussion of a real estate transaction
A licensee has a listing with a seller and has a buyer's representation agreement signed with a
buyer who desires to purchase this agent's listing. How is the agent operating? - Correct
Answer- as a non-appointed associate in an Intermediary relationship
, TREC was established in: - Correct Answer- 1949
Which of the following is the real estate licensing authority in Texas? - Correct Answer-
TREC
A termination date in a listing agreement must be: - Correct Answer- definite
Which of the following is NOT an agent's duty to a client? - Correct Answer- Trust
These are the duties: OLDCAR: Obedience, loyalty, disclosure, confidentiality, accounting,
reasonable care
The duty of ___________ means that an agent must follow all of the lawful instructions of
the client. - Correct Answer- obedience
Jerome is a licensed agent who desires to sell his mother's home. Jerome has the property
listed with his brokerage firm and finds a buyer himself to buy mom's home. Jerome should: -
Correct Answer- Disclose to the buyer in writing that the seller is his mother.
If an agent sells their own property, acting as a principal, the agent must: - Correct Answer-
disclose to the party in writing that they are a licensed agent
Confidential information between client and agent should be: - Correct Answer- kept
confidential forever
In most states other than Texas, the most common method of dealing with in-house
transactions between client buyers and sellers is: - Correct Answer- dual agency
When handling escrow funds for clients, the License Act requires that funds be deposited in
a "reasonable time". A reasonable time is defined as: - Correct Answer- 2 business days
The listing agreement should contain: - Correct Answer- the legal description of the property
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