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

A seller's agent has a duty of honesty to the buyer and must disclose all known material facts about the property that could affect the buyer's decision, even while representing 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

Merely providing a property flyer does not create an agency relationship; agency requires agreement, either written, oral, or implied through substantive actions that indicate representation.

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

Ratification occurs when a principal accepts the benefits of or confirms an agent's previously unauthorized acts, thereby creating a valid agency relationship retroactively.

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

The duty of confidentiality to a client survives termination of the agency relationship and continues indefinitely, meaning a former client's confidential information cannot be disclosed even after the transaction is complete.

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

A sales agent has no authority to maintain trust accounts; all earnest money must be promptly delivered to the sponsoring broker, who is responsible for proper handling and deposit.

TREC - Texas Real Estate Commission Practice Test

TREC - Texas Real Estate Commission Practice Test

TREC Agency Relationships and Disclosure 3