CHAMPIONS SCHOOL OF REAL ESTATE LAW OF AGENCY EXAM
ACTUAL EXAM LATEST 400 COMPLETE QUESTIONS AND
CORRECT DETAILED ANSWERS
Law of Agency - Champions School of Real Estate exam 1
The commission may suspend or revoke a license or take other disciplinary action if the license
holder, while acting as a broker or sale agent... - ANSWER-commingles money that belongs to
another person with the license holders own money
The disclosure of representation may be done - ANSWER-orally or in writing
When an agent and potential party enter into a "substantive" discussion of a real estate
transaction, - ANSWER-the party must be provided with a TREC-prescribed agency information
form
Does a substantive discussion always occur at the first face to face meeting - ANSWER-NO
When should the Information About Brokerage Services IABS form be provided to a seller -
ANSWER-prior to a listing presentation, and should be provided to a buyer prior to discussion of
a possible purchase
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A license holder is not required to provide a representation disclosure if - ANSWER-the
proposed transaction is for a residential lease for not more than one year and a sale is not being
considered
A broker may act as an intermediary between parties to a real estate transaction if - ANSWER-
the broker obtains written consent from each party for the broker to act as an intermediary in
the transaction
What form must an agent provide to a potential client at the first substantive discussion of a
real estate transaction - ANSWER-IABS
In real estate, an example of a general agent would be a(n) _____________ - ANSWER-property
manager
when an agent and potential party enter into a ____________ discussion of a real estate
transaction, the party must be provided with a TREC-prescribed agency information form. First
contact/orally or written - ANSWER-substantive
When acting in an intermediary transaction - ANSWER-the broker is required to treat all parties
honestly
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A special duty of honesty is applied in the act when - ANSWER-the license holder is buying or
selling property in his or her name
customer - ANSWER-also know as a third party, is a party to a transaction who is not being
represented by the license holder
A team name must end with the word - ANSWER-team or group
The principal is also known as - ANSWER-client
fiduciary relationship - ANSWER-a relationship founded on trust and confidence
Agency Relationship - ANSWER-Exists when one person (the agent) acts for, or on
behalf of another person (the principal).
the principal - ANSWER-is the one who hires and gives authority to the agent
Texas Real Estate License Act TRELA - ANSWER-Was passed 1939. The purpose is to protect the
public against unscrupulous brokers and sales agents.
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Texas Real Estate Commission TREC - ANSWER-Was created to enforce and administer TRELA in
1949. The purpose of this act is to protect the public against unscrupulous brokers and sales
agents.
A licensed broker may not pay a commission to or otherwise compensate a person directly or
indirectly for performing an act of a broker unless the person is... - ANSWER-a license holder or
a real estate broker licensed in another state
TRELA may suspend or revoke a license or take other disciplinary action if the license holder,
while engaged in real estate brokerage engages in... - ANSWER-conduct that is dishonest or in
bad faith or that demonstrates untrustworthiness
a broker works FOR - ANSWER-a client
a broker works WITH - ANSWER-a customer
how does a buyer become a client - ANSWER-by entering into a buyer representation
agreement with the broker
Subagent - ANSWER-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.
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