Agency Basics
What is the legal term for the relationship between a principal and an agent?
A) Partnership
B) Agency
C) Contractual Relationship
D) Fiduciary Duty
B) Agency
Who is responsible for all actions taken by salespersons in a real estate office?
A) Principal
B) Broker of Record
C) Licensee
D) Customer
B) Broker of Record
What type of agreement is required to form an agency relationship?
A) Listing Agreement or Buyer Representation Agreement
B) Verbal Contract
C) Ministerial Agreement
D) Subagency Disclosure
A) Listing Agreement or Buyer Representation Agreement
What must an agent provide at the first substantive dialogue with a party in a transaction?
A) Verbal Disclosure of Agency
B) Written Disclosure of Agency Relationships
C) Listing Agreement
D) Fiduciary Notice
B) Written Disclosure of Agency Relationships
What duty requires the agent to prioritize the client’s needs over their own?
A) Obedience
B) Loyalty
C) Disclosure
D) Confidentiality
Answer: B) Loyalty
What is the name for the person who hires an agent to represent their interests?
A) Principal
B) Consumer
C) Customer
D) Broker
A) Principal
What type of agent has the authority to conduct specific activities for a principal?
A) General Agent
B) Special Agent
C) Universal Agent
D) Ministerial Agent
Answer: B) Special Agent
What type of agency occurs when actions by a licensee imply representation without a formal agreement?
A) Express Agency
B) Implied Agency
C) Subagency
D) Gratuitous Agency
B) Implied Agency
What happens if a licensee fails to disclose their agency relationship properly?
A) Nothing happens
B) Penalties or Sanctions
C) Immediate termination of license
D) They forfeit commission
B) Penalties or Sanctions
What duty ensures the agent protects the client's confidential information?
A) Loyalty
B) Confidentiality
C) Accounting
D) Disclosure
B) Confidentiality
What type of act performed by an agent is clerical in nature and does not create an agency relationship?
A) Fiduciary Acts
B) Ministerial Acts
C) Express Acts
D) Subagent Acts
B) Ministerial Acts
What is the role of a licensee who performs general tasks within a business?
A) Fiduciary
B) Special Agent
C) General Agent
D) Customer
C) General Agent
What agency role allows a broker to represent both buyer and seller in a transaction in Texas?
A) Subagent
B) Fiduciary
C) Intermediary
D) Dual Agent
C) Intermediary
What type of agency is not permitted in Texas under any circumstances?
A) Dual Agency
B) Intermediary Agency
C) Special Agency
D) Subagency
A) Dual Agency
What fiduciary duty requires the agent to obey the lawful instructions of the client?
A) Loyalty
B) Obedience
C) Confidentiality
D) Disclosure
B) Obedience
What is the legal document that outlines the services and compensation for a brokerage?
A) Listing Agreement
B) Brokerage Agreement
C) Agency Disclosure
D) Sales Contract
B) Brokerage Agreement
What term describes a licensee who is not directly affiliated with the client's broker but cooperates in a transaction?
A) Subagent
B) Sponsoring Broker
C) Ministerial Agent
D) Dual Agent
A) Subagent
What type of agency is declared by a court because the licensee acted like an agent?
A) Express Agency
B) Gratuitous Agency
C) Implied Agency
D) Ostensible Agency
D) Ostensible Agency
What is the written consent required for a broker to act as an intermediary?
A) Agency Form
B) Disclosure Statement
C) Independent Contractor Agreement
D) Fiduciary Agreement
B) Disclosure Statement
What is the fiduciary duty of keeping the principal fully informed of all material facts?
A) Disclosure
B) Confidentiality
C) Loyalty
D) Accounting
A) Disclosure
What is the relationship called where one party places special trust, confidence, and reliance in another?
A) Fiduciary Relationship
B) Consumer Relationship
C) Ministerial Relationship
D) Broker Relationship
A) Fiduciary Relationship
What classification of agency gives a person total control over someone’s life and belongings?
A) Universal Agency
B) Special Agency
C) General Agency
D) Express Agency
A) Universal Agency
What is the term for an agency agreement where a broker performs tasks for a seller-client, such as marketing and negotiating offers?
A) General Agency
B) Special Agency
C) Universal Agency
D) Subagency
B) Special Agency
What law governs agency relationships in Texas real estate?
A) Real Estate Practices Act
B) Texas Brokerage Standards Act
C) Texas Real Estate License Act (TRELA)
D) Fiduciary Responsibilities Act
C) Texas Real Estate License Act (TRELA)
What fiduciary duty requires an agent to handle all funds and property entrusted to them responsibly?
A) Loyalty
B) Confidentiality
C) Accounting
D) Obedience
C) Accounting