Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

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Prepare for the Texas Real Estate SAE Exam with our educational quiz. Study using flashcards and multiple choice questions, each with detailed explanations to ensure you're ready to pass your exam!

Practice this question and more.

What type of relationship do agents have with their sponsoring broker that makes the broker liable for the agent's transactions?

General agency
Special agency
Limited agency
Transactional agency

The correct answer is: General agency

Agents have a general agency relationship with their sponsoring broker. This type of relationship allows the broker to control and oversee the activities of the agent while also extending liability for the actions the agent takes during their professional activities. In a general agency relationship, the agent acts on behalf of the broker with broad authority to perform tasks and make decisions related to the brokerage, including negotiating contracts and making offers on behalf of the broker's clients. The reason the broker is liable for the transactions carried out by the agent comes from the scope of authority granted under general agency. The more expansive the authority, the more responsibility falls on the broker to supervise their agent's actions and ensure compliance with applicable laws and ethical standards. This contrasts with other types of agency relationships, where the authority and resulting liability may be more limited or specific. Understanding the implications of this relationship is crucial for both the agent and the broker, as it sets the foundation for accountability and responsibility in real estate transactions.