TREC Agency Relationships and Disclosure 3

Question 1

When a Texas license holder represents a seller, which of the following must the license holder disclose to a prospective buyer?

Accepted Answer

All material facts about the property known to the license holder

Answer

The seller's minimum acceptable price

Answer

The seller's reasons for selling

Answer

The license holder's commission arrangement with the seller

Question 2

An agency relationship in Texas real estate can be created by all of the following EXCEPT:

Accepted Answer

A license holder simply handing a buyer a property flyer

Answer

A written buyer's representation agreement

Answer

An express oral agreement acknowledged by both parties

Answer

Implication through conduct and actions of the parties

Question 3

What does 'ratification' mean in the context of Texas real estate agency law?

Accepted Answer

A principal accepting and confirming an agent's unauthorized acts after the fact

Answer

TREC approving an agency agreement before it takes effect

Answer

A broker assigning a sales agent to represent a specific client

Answer

A client formally ending an agency relationship in writing

Question 4

Under Texas law, an agent's duty of confidentiality to a former client generally:

Accepted Answer

Survives the termination of the agency relationship indefinitely

Answer

Ends automatically 90 days after the transaction closes

Answer

Is waived once the buyer and seller sign a final contract

Answer

Applies only during the active listing period

Question 5

A Texas real estate sales agent receives an earnest money deposit from a buyer. The agent must:

Accepted Answer

Deliver the earnest money to their sponsoring broker promptly

Answer

Deposit the funds into their personal bank account until closing

Answer

Hold the funds in escrow using their own client trust account

Answer

Forward the earnest money directly to the title company within 24 hours

Question 6

Which of the following actions would constitute a breach of an agent's fiduciary duty of loyalty in Texas?

Accepted Answer

Purchasing the listed property for the agent's own account without full disclosure

Answer

Presenting all offers to the seller, even low ones

Answer

Recommending the seller consult an attorney before signing

Answer

Advising the buyer to obtain an independent home inspection

Question 7

Under TRELA, what must happen for a seller's broker to lawfully become an intermediary in a transaction?

Accepted Answer

The broker must obtain written consent from both the seller and the buyer to represent both

Answer

The seller must verbally authorize intermediary status at the time of listing

Answer

TREC must issue an intermediary permit for the specific transaction

Answer

The listing agreement must have been in effect for at least 30 days prior