Real Estate Fraud, Broker's Fees

Question 1

What is the act of two or more competitors aligning together to force consumers to pay a higher amount than they would pay if competition were unrestrained called?

Answer 1

Price fixing

Question 2

How is the commission to be paid in a real estate transaction determined?

Answer 2

The commission is determined by negotiation between the broker and the client.

Question 3

What are the 3 elements of fraud?

Answer 3

Intent, reliance and damage

Question 4

What is the primary purpose of the Texas Real Estate Commission?

Answer 4

To protect the public from unscrupulous real estate licensees

Question 5

Which of the following is required for fraud?

Answer 5

The consumer must have relied on the information.

Question 6

A person in violation of the Anti-Trust could be fined

Answer 6

$1,000,000.00

Question 7

The main elements of fraud include all the following EXCEPT

Error.
Reliance.
Intention.
Damage.

Answer 7

Error

RID is the Answer

Question 8

The Texas Real Estate Commission exists for the purpose of protecting the public from licensees who may not follow the Texas Real Estate License Act properly or the Rules of TREC.

Answer 8

Violations the part of licensees while using these forms can result in monetary damages, loss of license and even imprisonment if the transaction involves fraud. Fraud is intentional misrepresentation and could result in jail time.

Question 9

Reliance

Answer 9

Did the consumer have the right to rely on the information or fact? If a statement is made by a real estate professional is actionable, it should be relied upon as fact.

Question 10

Intention

Answer 10

The difference between misrepresentation and fraud is the element of intent. The person KNEW this could harm the other person or knew the facts were different and still proceeded forward with the transaction.

Question 11

Damage

Answer 11

or the loss of something of value. The value is usually actual money losses. Damage is generally easy to prove for attorneys because a person could claim damage even if it is simply mental anguish.

Question 12

Broker fees are determined

Answer 12

between a broker and his or her client. Broker fees are always on a separate written agreement and not included on a purchase agreement.

Question 13

Broker fees are always negotiable between a broker and his or her client. Commissions are NOT set by the Texas Real Estate Commission or the state of Texas.

Answer 13

For a group of brokers to agree upon a set commission would be a violation of the Sherman Anti-Trust Act.