Texas Real Estate STANDARDS OF CONDUCT Questions and Answers Latest 2024/2025 with complete solutions

If a real estate broker maintains a trust account, how many years must that broker retain records of all deposits and withdrawals from the account? - four. A licensee maintaining a trust account must retain a documentary record of each deposit or withdrawal from the account for a period of four years. Which Canon of Professional Ethics requires that the broker or salesperson employ prudence and caution in the discharge of her duties to avoid misrepresentation? - integrity. The Canons of Professional Ethics and Conduct define integrity to include "...employment of prudence and caution so as to avoid misrepresentation...by acts of commission or omission." A broker or salesperson may perform all of these actions in preparation for a closing EXCEPT - conduct any title searches that might be required. Conducting a title search for another person in connection with the license holder's brokerage activity with that person may lead to charges of practicing law without a license if the licensee advises the person regarding the validity or legal sufficiency of an instrument or the validity of title to real property. A broker or salesperson who fails to give the statutory title notice to the buyer at or before closing A)must forfeit the entire commission on the subject transaction but in so doing is absolved of any other liability. B)is required to show cause as to why such disclosure was not made. C)may have the license suspended or revoked and cannot collect a commission on the subject sale. D)will have the license suspended without reinstatement for two years. - C)may have the license suspended or revoked and cannot collect a commission on the subject sale.Failure to advise a buyer in writing before the closing of a real estate transaction that the buyer should obtain title assurance is grounds for suspension or revocation of a license; specifically, the agent must advise the buyer to have the abstract covering the real estate that is the subject of the contract examined by an attorney chosen by the buyer or be provided with or obtain a title insurance policy. A broker signs a listing agreement with a seller. The agreement contains the following clause: "If the property has not been sold after three months from the date of this signing, this agreement will automatically continue for additional three-month periods thereafter until the property is sold." Based on these facts, the agreement - provides grounds for loss of the broker's license. Listings must contain a definite termination date not subject to prior notice or the licensee could face TREC disciplinary action. A real estate license may be suspended or revoked for - publishing an advertisement that may create a misleading impression. The commission may suspend or revoke a license if the license holder publishes or causes to be published an advertisement, including an advertisement by newspaper, radio, television, the internet, or display, that misleads or is likely to deceive the public, tends to create a misleading impression, or fails to identify the person causing the advertisement to be published as a licensed broker or agent. A broker has developed a website advertising the broker's office. What, if anything, does the broker need to include? - status as a broker on each page of the site. Each page of the website must indicate her status as a broker or agent. A salesperson has developed a website to attract buyers and sellers. What, if anything, must the salesperson include? - name of the sponsoring broker/company. Each page of the salesperson's website must include the name of the sponsoring broker/company. A seller told a broker that she wanted to net $50,000 when she sold her house. The broker accepted the listing and did not specify a maximum amount for the broker's commission in the listing agreement. The broker sold the house for $160,000. The broker gave $50,000 to the seller and kept the rest. All of the following are true EXCEPTA)the broker took unfair advantage of the client and failed to put the client's interest above his own. B)the broker should have given the seller his true opinion of the market value of her house. C)the broker's commission exceeds statutory and NAR guidelines. D)as the seller's agent, the broker had a duty to sell the house for the best possible price for his client while limiting the broker to only a specified maximum commission. - C)the broker's commission exceeds statutory and NAR guidelines. Texas statutes and NAR do not set guidelines for commissions. While net listings are legal in Texas, this example illustrates the conflict of interest that a net listing provokes. The broker was not working in the best interest of the client and failed to limit himself to a specified maximum commission as required by law. According to the Texas Real Estate License Act, which of the following must appear in a written listing agreement in Texas? - a definite termination date not subject to prior notice. A license may be suspended or revoked if a broker fails to specify a definite termination date not subject to prior notice in any contract (other than property management) in which the licensee agrees to perform services for the client. All of the following are grounds for the Texas Real Estate Commission to revoke a license EXCEPT - failing to disclose a death on a property listed for sale, if the death occurred due to a cause that is unrelated to the property condition. Licensees have no duty to disclose that a death occurred on a property by natural causes, suicide, or accident unrelated to the condition of the property. All of the following are violations of the Texas Real Estate Licensing Act EXCEPT A)failing to disclose to a potential purchaser any latent structural defects known to the license holder.B)receiving a commission without the knowledge and consent of the license holder's client. C)encouraging a seller to reject an offer because the of the prospective buyer's religion. D)placing a For Sale sign in front of a house after receiving written permission to post the sign. - placing a For Sale sign in front of a house after receiving written permission to post the sign. A broker must always have written consent to erect a For Sale or lease sign on a property. All trust funds received by a broker on behalf of the principals must be deposited in the broker's escrow or trust account or with an escrow agent named in the contract by the close of business on the - second working day, or as agreed upon in writing by the parties to the contract. TREC rules require that other people's money, such as earnest money and security deposits, if held by the broker as escrow agent or trustee for the funds, must be deposited by the close of business the second working day the license holder receives the money as escrow agent in a real estate transaction after the agreement becomes a binding contract. That is unless another time has been agreed to by the parties in writing. Note: The TREC promulgated contract forms are worded such that neither broker is required by the contract to ever even see the earnest money check. The TREC promulgated contract forms state that "upon execution of this contract by all parties, Buyer shall deposit...." This contractual provision places the burden for deposit of the earnest money on the buyer and does not allow for a "close of business the second working day" provision. Under the terms of the buyer's offer, if using a TREC promulgated form, the seller's broker appears to have no contractual right to require that the earnest money or earnest money check be submitted with the buyer's offer. Requiring photocopies of the buyer's earnest money check to show to the seller is likely a meaningless and unnecessary gesture.