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Agency/Brokerage Questions and Answers | Latest Version | 2025/2026 | Correct & Verified
What is the main duty of an agent in a fiduciary relationship with a client?✔✔To act in the best interest of the client at all times
What does the term "agency" describe in real estate?✔✔A legal relationship where one party represents another in dealings with third parties
Who creates the agency relationship in real estate?✔✔The client and the broker through mutual agreement
What is the duty of confidentiality in agency?✔✔The agent must not reveal private information about the client, even after the relationship ends
What type of agency allows the agent to act on behalf of the client in limited matters?✔✔Special agency 1 / 3
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When must a license holder disclose representation to another party?✔✔At the first substantive communication
What is a material fact that must be disclosed by an agent?✔✔Any known information that could affect a buyer’s decision
Can an agent give legal advice to a client?✔✔No, agents must recommend clients seek professional legal counsel
What does “loyalty” mean in the context of agency duties?✔✔The agent must place the client's interests above their own
What is a dual agency?✔✔A situation where one agent represents both the buyer and the seller in the same transaction
Is dual agency allowed in Texas?✔✔No, Texas uses intermediary relationships instead 2 / 3
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Who pays the commission in a typical real estate transaction?✔✔The seller, unless otherwise agreed upon
What is the difference between a customer and a client?✔✔A client has an agency relationship; a customer does not
What is a broker’s responsibility when sponsoring agents?✔✔To supervise and ensure all agents follow real estate laws and ethics
What is a universal agent?✔✔An agent who has broad authority to act on behalf of a client in all matters
What is an example of a ministerial act in real estate?✔✔Unlocking a door for a showing without offering advice
What form is used to establish an agency relationship in Texas?✔✔A signed representation agreement
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