Texas Sales Agent Real Estate Examination – HTML

Q1. What is the primary purpose of the Texas Real Estate Commission (TREC)?

Promote the real estate industry
Protect license holders from lawsuits
Protect the public from unethical practices
Represent brokers in legislative matters

Q2. What is the purpose of the Texas Real Estate Recovery Trust Account?

To provide funds for real estate education
To compensate consumers injured by licensee misconduct
To reimburse brokers for unpaid commissions
To support lobbying efforts

Q3. Which of the following actions requires a real estate license in Texas?

Paying a referral fee to an unlicensed assistant
Negotiating real estate sales for others for compensation
Selling your own property without a license
Answering phones in a broker’s office

Q4. How long must brokers retain transactional records in Texas?

2 years
3 years
4 years
7 years

Q5. What must a license holder do if convicted of a felony?

Report it to their broker only
Report it to TREC within 30 days
Wait until renewal to disclose
Notify the buyer in writing

Q6. When must a license holder provide the Information About Brokerage Services (IABS) form?

Before showing a property
At the first substantial communication about a transaction
When the buyer signs a contract
When the broker signs a listing agreement

Q7. Which of the following best describes an intermediary relationship?

A license holder acting as a property manager
A broker representing both buyer and seller in the same transaction
A referral agent paid by another broker
A buyer working with multiple agents

Q8. What is the consequence of practicing real estate without a license in Texas?

Suspension of future license eligibility
A fine up to $5,000 per day per violation
Automatic granting of a temporary license
Written warning from TREC only

Q9. What is required for a broker to sponsor a sales agent?

Submit a signed lease agreement
File an affiliation request and assume responsibility for the agent
Provide the agent with an office and E&O insurance
Notify the local board of Realtors

Q10. What must be included in all real estate advertising?

The broker’s license number
A fair housing logo
The license holder’s name and sponsoring broker’s name
The listing agreement date

Q11. What is required for a valid intermediary relationship in Texas?

TREC approval prior to the transaction
Written consent from both parties to allow the broker to act as intermediary
Appointment of separate brokers to each party
Disclosure of property defects

Q12. Who may maintain a trust account in a real estate brokerage?

Any licensed sales agent
The designated office administrator
Only the broker or a designated associate broker
The transaction coordinator

Q13. Which of the following is considered commingling of funds?

Holding earnest money in the client’s personal account
Placing personal funds in the broker’s trust account to cover banking fees
Depositing client funds into the broker’s business operating account
Transferring escrow to the title company before closing

Q14. Which document notifies consumers that a real estate license holder is regulated by TREC?

The IABS form
Consumer Protection Notice CN 1-5
The Broker’s Compensation Disclosure
Dual Agency Acknowledgment

Q15. What is the maximum administrative penalty TREC may impose per violation per day?

$1,000
$2,500
$5,000
$10,000

Q16. A license holder places a “For Sale” sign on a property without permission. What rule is being violated?

Disclosure rule
Signage authorization requirement
MLS advertising rule
Sponsorship reporting requirement

Q17. What is required in all advertisements by a license holder?

A TREC logo
The broker’s phone number only
The license holder’s name and the sponsoring broker’s name
The property’s MLS number

Q18. What happens to a license if continuing education is not completed by the renewal deadline?

It is automatically suspended for 30 days
The license holder is fined but may continue practicing
The license expires and may be reinstated upon completion and fees
Nothing, if CE is completed within 6 months

Q19. Which action would violate the Fair Housing Act?

Refusing to show property on a Sunday
Telling a seller that minority buyers are moving into the neighborhood
Charging extra fees for late payments
Not disclosing dual agency

Q20. Which of the following would be considered a misleading advertisement?

An ad stating “Best deals in town!”
An ad stating “Top Producer, 2020” with no documentation
A listing with professional photos
A broker advertising on social media

Q21. How many hours of continuing education (CE) are required for license renewal in Texas?

6 hours
12 hours
18 hours
24 hours

Q22. What must a broker do before sponsoring a new sales agent?

Submit a written training manual to TREC
Provide office space and signage
File a sponsorship request and supervise the agent
Require the agent to pass the broker exam

Q23. What must a license holder do if they are found guilty of a felony?

Notify the buyer and seller
Wait until license renewal to disclose
Report it to TREC within 30 days
Take an ethics class before continuing practice

Q24. If a broker fails to properly supervise sponsored sales agents, what could TREC do?

Issue a cease and desist order only
Temporarily suspend the broker’s E&O insurance
Suspend or revoke the broker’s license
Penalize the agents only, not the broker

Q25. What is the earliest point a license holder can lawfully present the IABS form to a prospective buyer?

During the first showing
At the open house
At the first substantive conversation about a transaction
After signing the buyer representation agreement

Q26. A license holder refers a buyer to a title company and receives a fee. What law does this potentially violate?

RESPA
DTPA
Sherman Antitrust Act
ECOA

Q27. What must a license holder include when advertising their services on social media?

Their personal email address
The name of their sponsoring broker
A link to their TREC profile
A license number

Q28. Which of the following actions is considered an unlawful practice of law?

Explaining the meaning of a paragraph in a promulgated contract
Advising a client on which form to use
Altering a promulgated form to add a new paragraph with legal consequences
Telling a client the expiration date of an option period

Q29. A buyer’s agent presents an offer below list price and asks the seller’s agent not to disclose the price to the seller. What must the seller’s agent do?

Notify TREC
Refuse to present the offer
Present the offer to the seller regardless
Contact the buyer directly

Q30. When can a license holder legally offer a rebate to a buyer?

Only with the seller’s written consent
If it is not tied to any future transaction or contingent behavior
Never — rebates are prohibited
Only with TREC pre-approval

Q31. When must a license holder disclose that they are a principal in a transaction?

Only if they are representing a family member
If they have a financial interest in the property
Only after a contract is signed
Never, if they are not the agent of record

Q32. What is the purpose of TREC promulgated forms?

To protect real estate brokers from liability
To promote standardized and lawful real estate contracts
To provide marketing materials to license holders
To eliminate the need for attorneys in real estate

Q33. When may a license holder act as an intermediary without appointments?

When only one sales agent is involved in the transaction
When representing both parties in different counties
Only if both parties waive their right to representation
When acting as a dual agent with written consent

Q34. A sales agent wants to advertise a property. What must they include in the ad?

The license holder’s personal phone number
A statement that the license holder is a REALTOR®
The name of the sponsoring broker
A photo of the property owner’s signature

Q35. Which of the following activities requires a real estate license in Texas?

Selling your own property without compensation
Managing a family member’s rental as a favor
Negotiating the sale of a property for a fee
Providing marketing materials for a broker

Q36. A license holder receives a commission from a broker who is not their sponsor. What is this called?

Cooperative compensation
An MLS override
An unauthorized payment
A net listing bonus

Q37. A broker acts negligently, causing a client financial harm. What can the client do?

Sue the listing agent
File a claim against the Texas Real Estate Recovery Trust Account
Report the broker to the county clerk
Automatically void the transaction

Q38. What must a license holder do before placing a sign on a seller’s property?

Notify the city zoning board
Get oral consent from the seller
Obtain written permission from the owner
Schedule a home inspection

Q39. What is the broker’s responsibility for trust account reconciliations?

Annual reconciliations are required
Monthly reconciliations must be conducted and documented
Only third-party accountants may reconcile trust accounts
No reconciliation is needed unless funds are disputed

Q40. Which transaction type does NOT require the use of a TREC-promulgated form?

Sale of a residential property using a license holder
Lease of residential property for more than one year
Sale of commercial property
Contract between buyer and seller prepared by an attorney

Q41. A buyer wants to waive the appraisal contingency. What must be true for this to be valid?

The buyer must submit a notarized letter to the lender
The waiver must be in writing and signed by the buyer
The appraisal must come in below contract price
The seller must countersign the waiver at closing

Q42. What is the function of the Texas Real Estate Broker-Lawyer Committee?

To represent licensees in disciplinary hearings
To draft and revise promulgated contract forms
To conduct license exams
To monitor E&O insurance carriers

Q43. What must a license holder do before negotiating the sale of their own property?

Hire another licensee to represent them
Notify TREC of the transaction
Disclose their licensed status in writing
Remove their license from active status

Q44. What action can TREC take if a license holder violates a Commission rule?

Automatically revoke the license without a hearing
Issue an oral reprimand only
Suspend, revoke, or impose an administrative penalty
Transfer the case to the local board of Realtors

Q45. What must a license applicant provide as part of the background check process?

Two personal references
A fingerprint submission
A credit report
A notarized statement of intent

Q46. A license holder wants to use a net listing agreement. Under what condition is this permitted?

When used for properties valued over $1 million
When the license holder is also the buyer
Only if the client is familiar with market pricing
Only if the seller is fully informed and agrees in writing

Q47. Which of the following actions is prohibited under the Canons of Professional Ethics?

Using a team name in advertisements
Offering to pay a referral fee to a past client
Offering legal advice to a party in the transaction
Recommending a home inspector

Q48. What must be true for a buyer to terminate under the option clause of a residential sales contract?

The buyer must terminate before closing
The buyer must terminate within the option period and in writing
The seller must agree to release earnest money
The buyer must provide a home inspection first

Q49. A license holder collects an earnest money check but delays delivery to the escrow agent. What is this?

A permitted delay under TREC rules
A violation of fiduciary duty
A standard industry practice
A technical error only if more than 7 days late

Q50. What happens if a license holder engages in fraud or misrepresentation?

TREC can suspend or revoke the license
The broker must mediate with the client
The case is referred to the local Realtor board
The license is suspended only after a second offense

Q51. What must a Texas license holder do before placing a sign on a property for sale?

Obtain approval from the local MLS
Notify the seller by phone
Obtain written consent from the property owner
File the sign location with TREC

Q52. When representing both parties in a transaction under intermediary status, the broker must:

Appoint one agent to both the buyer and seller
Provide advice and opinions to both sides
Remain neutral and avoid favoritism
Have a co-broker handle negotiations

Q53. What is the primary purpose of the Real Estate License Act in Texas?

To promote real estate careers
To generate revenue for the state
To protect the public from unqualified licensees
To regulate commission structures

Q54. Which of the following must be included in all email advertising by Texas license holders?

The sender’s license number
A link to TREC’s complaint form
A clear indication of the sender’s licensed status and brokerage name
A broker’s signature approval

Q55. How soon must earnest money be delivered to the escrow agent after contract execution in Texas?

Within 1 business day
By 5:00 PM on the third business day
Within 72 hours of offer acceptance
Within 48 hours of closing

Q56. When must a license applicant disclose a prior criminal conviction to TREC?

Only if it was a felony
Only if it occurred in the past 7 years
Always, regardless of when or what type
Only if a court order is still active

Q57. What is the consequence if a license holder misrepresents a material fact to a buyer?

No action unless the seller complains
Civil liability and possible license suspension
A verbal warning from TREC
A $50 fine per offense

Q58. What is an unlicensed assistant in Texas prohibited from doing?

Setting appointments with clients
Explaining contract terms to buyers
Delivering paperwork to a title company
Placing signs and lockboxes

Q59. What must be done if a license holder changes their business address?

Notify the county clerk within 10 days
Send a certified letter to TREC within 15 days
Update their contact info in the TREC portal within 10 days
No action is required

Q60. A license holder tells a buyer the property has “no foundation issues,” despite cracks in the slab. This is an example of:

Puffing
Fraud
Negligence
Due diligence

Q61. What must a broker do if they learn a sponsored agent has violated TREC rules?

Suspend the agent immediately
Report the agent to the local REALTOR® board
Take action to ensure the conduct is corrected and notify TREC if required
Wait for TREC to conduct an investigation

Q62. What is the maximum administrative penalty TREC may impose per violation?

$500
$1,000
$5,000
$10,000

Q63. What is a license holder’s obligation regarding third-party services offered to clients?

Require clients to use them
Disclose affiliations if receiving compensation
Avoid referring services entirely
Provide only a single preferred vendor

Q64. A broker allows an unlicensed assistant to host an open house. What is the result?

This is allowed if the assistant is supervised
It is a minor infraction
It is a violation, as only licensed agents may conduct open houses
It is acceptable if no questions are answered

Q65. When must a license holder provide the Consumer Protection Notice to the public?

Only when requested
At open houses only
It must be prominently displayed on their website and in the office
During closings

Q66. What is considered commingling of funds?

Paying vendors from an escrow account
Holding funds in a separate escrow account
Mixing client funds with broker’s personal or business funds
Refunding earnest money after closing

Q67. What is the term for a situation in which one broker represents both the buyer and seller in a transaction?

Designated agency
Dual agency
Intermediary
Transactional neutrality

Q68. A license holder receives a trust check but delays depositing it. What is this called?

Commingling
Fraud
Conversion
Negligent handling of funds

Q69. When is it acceptable for a license holder to use a form drafted by their attorney?

Only if no TREC-promulgated form exists for that transaction type
Only if approved by TREC
Never—only TREC forms are allowed
When the buyer requests it in writing

Q70. A license holder fails to inform a buyer about a known roof leak. What is this an example of?

Fraud by omission
Puffery
Mispricing
Unintentional error

Q71. What is the legal effect of a contract signed by a minor in a real estate transaction?

It is void and unenforceable
It is valid with parental consent
It is voidable at the option of the minor
It is fully enforceable by either party

Q72. What does the term “steering” refer to in real estate?

Directing clients to licensed professionals
Recommending lenders to clients
Guiding clients to or away from certain areas based on protected characteristics
Controlling negotiations between parties

Q73. A license holder tells a seller not to disclose prior flooding because “it could hurt the sale.” This is:

Aggressive marketing
Legal if the flooding was over five years ago
A DTPA violation and unethical conduct
Acceptable if the buyer waives inspection

Q74. What is the effect of an “as is” clause in a Texas real estate contract?

It removes all seller liability
It prevents buyer inspections
It protects the seller only if no fraud or misrepresentation occurred
It voids the buyer’s right to negotiate repairs

Q75. What is the primary duty of a buyer’s agent under a Texas agency agreement?

To obtain the lowest commission possible
To promote the interests of the buyer with loyalty and full disclosure
To act in the interest of both parties equally
To prioritize the listing broker’s instructions

Q76. What document notifies a buyer of any prior use of a property for hazardous waste storage?

The MLS listing
Seller’s Disclosure Notice
TREC Environmental Hazards Form
Lead-Based Paint Addendum

Q77. Which party usually pays for the owner’s title policy in a Texas residential transaction?

The seller, unless otherwise agreed
The buyer, by default
The mortgage lender
TREC sets the paying party

Q78. How long does a buyer have to terminate a contract after receiving the Seller’s Disclosure Notice?

3 days
5 days
7 days
10 days

Q79. A license holder tells a client, “You’ll double your money on this property in a year.” This is:

Allowable if the market supports it
Permissible if stated as opinion
Prohibited as an unsubstantiated guarantee
Acceptable if the broker agrees

Q80. What type of property is exempt from the Seller’s Disclosure Notice requirement?

Property in a rural area
Foreclosures and new construction sales
Homes built before 1978
Properties sold through FSBO

Q81. What must a license holder do when receiving multiple offers on a property?

Present only the highest offer
Wait 24 hours to collect all offers
Present all offers promptly to the seller
Choose which offer is in the seller’s best interest

Q82. Which of the following scenarios represents blockbusting?

A landlord refusing to rent to someone with poor credit
A broker encouraging homeowners to sell because a minority family moved in
An agent refusing to show properties based on school quality
Steering clients toward homes based on price range

Q83. A license holder is asked about crime statistics in a neighborhood. What is the best response?

“This is a safe neighborhood, I live nearby.”
“You should check with the local police or crime database.”
“There have been no crimes reported recently.”
“It’s not something you need to worry about.”

Q84. When may a broker pay a referral fee to an unlicensed individual?

When the transaction closes
When the referral is for a lease
Never—it is prohibited
When the unlicensed person is related to the client

Q85. A sales agent leaves a broker and takes listing agreements with them. This is:

Allowed with the seller’s approval
A violation unless the broker releases the listings
Encouraged by TREC to promote free competition
Legal if the agent originated the listing

Q86. What is the TREC rule on rebate offers to consumers?

Rebates are not allowed in any transaction
Rebates must be offered equally to all parties
Rebates are allowed but must be disclosed in writing
Rebates can only be offered to sellers, not buyers

Q87. If a buyer cancels a contract within the option period, what happens to the earnest money?

The seller keeps it
It is split 50/50
It is refunded to the buyer
It is forfeited to the broker

Q88. Which of the following must be disclosed even if not asked?

Previous asking price
Recent pest control activity
Material defects known to the seller
The seller’s reason for moving

Q89. A buyer asks about schools in the area. What is the proper response?

“The schools here are excellent—top rated!”
“You can research school ratings at the TEA website.”
“I have children in those schools—they’re great.”
“The private schools are better than the public ones.”

Q90. What must be included in a broker’s transaction file?

A video of property tours
Copies of all signed disclosures and contracts
Social media history of client interactions
Broker’s commission breakdown

Q91. What is the mandatory retention period for real estate records in Texas?

1 year
2 years
3 years
5 years

Q92. A broker uses a business name not registered with TREC. What is this considered?

Branding
Misleading advertising
Legal if disclosed to clients
Allowed for teams only

Q93. What is required for a broker to pay a commission to a sales agent?

The agent must be sponsored and licensed
The agent must have completed Legal Update I & II
The client must sign a waiver
The broker must notify TREC

Q94. When must the IABS form be provided to a prospective client?

At contract signing
At closing
At the first substantive communication
When the broker chooses

Q95. A license holder misstates square footage on a listing. This is considered:

Puffery
Negligent misrepresentation
Comparative marketing
Standard advertising

Q96. Which agency enforces federal fair housing laws?

Texas Real Estate Commission (TREC)
U.S. Department of Justice
Texas Workforce Commission
U.S. Department of Housing and Urban Development (HUD)

Q97. A sponsoring broker is liable for the actions of:

All license holders in the MLS
Their own sponsored agents
Buyers and sellers in their transactions
Unlicensed assistants hired by clients

Q98. What must be included in the advertisement of a team name?

The team leader’s personal license number
The team’s tax ID
The sponsoring broker’s name
The phone number of all team members

Q99. What is the result of practicing real estate in Texas without a license?

A Class B misdemeanor
A cease and desist letter from TREC
A Class A misdemeanor and possible administrative penalties
Civil penalty but no criminal charges

Q100. A sales agent makes cold calls to potential sellers without checking the DNC list. This is:

Legal for sales agents
A violation of federal law
Allowed in Texas if the call is live
Permitted if under broker supervision

Q101. What must a broker do before a license holder can use an assumed business name?

Submit a notarized form to the county clerk
Register the name with the Secretary of State
Notify TREC in writing and receive acknowledgment
Include it on advertising first, then notify TREC

Q102. Which of the following statements is true about a license holder’s fiduciary duty of disclosure?

Only material facts that favor the client must be disclosed
Confidential information must always be disclosed to buyers
All known material facts about the property must be disclosed to all parties
Disclosure is optional unless asked in writing

Q103. A license holder receives a bonus from a home warranty company for each sale. What is required?

Disclose the bonus in writing before closing
Report the bonus on their annual TREC renewal
Refuse the bonus if not paid through the broker
Notify the buyer only after payment is received

Q104. Which of the following requires a real estate license in Texas?

Property owners selling their own homes
Attorneys negotiating leases for clients
Apartment locators receiving referral fees
Corporate officers transferring company-owned properties

Q105. A license holder fails to advise a buyer to have a property inspected. What could this result in?

Nothing, as inspections are optional
A lawsuit under the Deceptive Trade Practices Act (DTPA)
TREC automatically revoking the license
The buyer being unable to negotiate repairs

Q106. What happens if a broker’s trust account is not properly reconciled monthly?

Nothing unless there is a complaint
TREC will freeze all escrow funds
It is considered a violation of trust account management rules
It is the agent’s responsibility, not the broker’s

Q107. What is the legal status of a contract that is missing the signatures of both parties?

Valid
Executory
Void
Unenforceable

Q108. Under Texas law, who may file a claim against the Real Estate Recovery Trust Account?

Any broker or agent
A consumer who suffered damages due to fraud or misrepresentation
Any person denied a license
A seller who cancels a contract

Q109. A license holder provides a CMA with intentional exaggeration. What is the result?

Nothing, since CMAs are just estimates
The broker may be liable under DTPA for misrepresentation
The client must prove damages before reporting to TREC
It is considered acceptable marketing strategy

Q110. Which document defines the broker’s obligation to represent the buyer’s best interests?

Information About Brokerage Services (IABS)
Listing Agreement
Buyer Representation Agreement
TREC Consumer Protection Notice

Q111. What is the minimum age requirement to obtain a real estate license in Texas?

16 years
18 years
20 years
21 years

Q112. Which of the following acts by a license holder would be considered unauthorized practice of law?

Explaining the purpose of a TREC form
Advising a client to consult an attorney
Modifying the language of a promulgated contract form
Completing a property disclosure form

Q113. Which agency investigates ethics violations in real estate advertising?

Texas Workforce Commission
Federal Communications Commission
Texas Real Estate Commission
Better Business Bureau

Q114. What must a license applicant do before scheduling their licensing exam?

Submit fingerprints to the broker
Complete pre-licensing coursework and receive eligibility from TREC
Pass a background check from the local police department
Receive a sponsoring broker’s signature

Q115. Which of the following is a legally required disclosure for residential transactions?

Information about proximity to shopping malls
Whether the home has been professionally staged
Known material defects in the property
The seller’s motivation to move

Q116. What is the consequence for a broker who fails to maintain written policies for supervision?

A warning letter
A fine and mandatory education
No consequence unless a complaint is filed
License revocation by the Texas Attorney General

Q117. What is required to establish an intermediary relationship in Texas?

A separate intermediary license
Written consent from both parties
A verbal agreement with both buyer and seller
Approval from the title company

Q118. A license holder wants to open a separate account for trust funds. What is required?

Approval from the board of REALTORS®
A CPA audit every 6 months
Broker supervision and proper recordkeeping
A bond issued by the state comptroller

Q119. Which of the following is considered commingling?

Depositing earnest money into a trust account
Holding a check for delivery per instructions
Depositing client funds into a personal account
Refunding unused escrow funds to a buyer

Q120. When is a license holder required to renew their license in Texas?

Every calendar year
Two years after the license was issued
After completing one renewal cycle of continuing education
Every five years with additional CE hours

Q121. What is the consequence if a license holder fails to complete mandatory continuing education (CE) before renewal?

Automatic license suspension
A 6-month grace period to complete CE
The license expires and must be reactivated with late fees and CE completion
The broker may complete the CE on their behalf

Q122. What is required for a license holder to legally refer a client to a third-party vendor?

Nothing—referrals are always permitted
A formal business contract
Disclosure of any financial interest in the vendor
Verbal consent from the broker

Q123. Which activity is permitted for an unlicensed assistant in Texas?

Hosting an open house
Discussing negotiation terms with a buyer
Delivering paperwork to clients without explanation
Explaining contract clauses to a seller

Q124. When must a license holder provide the Consumer Protection Notice?

Only at closing
Only if the consumer requests it
At the time of listing a property
On the license holder’s website and in their place of business

Q125. A license holder makes a misrepresentation that causes financial harm. What is the most likely result?

Suspension of the license only
Civil liability under DTPA
A warning from TREC with no penalty
Automatic license revocation

Q126. A sponsoring broker delegates training to a team leader. What must the broker still ensure?

That agents work only on listings
That all agents file taxes on time
That training is documented and reviewed
That team leaders are paid bonuses for training

Q127. Which statement is TRUE about net listings in Texas?

They are illegal in Texas under all circumstances
They are permitted if the client agrees in writing and understands the terms
They are only used in commercial transactions
They are allowed only with court approval

Q128. What is the purpose of the Legal Update I and II courses?

To prepare new license applicants for the state exam
To meet CE requirements related to industry changes and law updates
To fulfill broker ethics training only
To substitute for GRI designation courses

Q129. What happens if a license holder is convicted of a felony?

Their license is immediately suspended for 5 years
They may continue working until renewal
They must report it to TREC and may face disciplinary action
They automatically lose all CE credit

Q130. Which of the following would violate the Canons of Professional Ethics?

Calling a client after 5 PM
Offering a bonus to a cooperating agent
Discriminating against a buyer based on national origin
Hosting a broker open house

Q131. What must a license holder do when receiving a referral fee from an out-of-state broker?

Refuse the fee if it is over $500
Ensure the out-of-state broker is not actively engaged in the transaction in Texas
Notify the Texas Attorney General
Have the client sign a referral acknowledgment

Q132. Which of the following would constitute a violation of the Sherman Antitrust Act in real estate?

Brokers independently deciding to raise their own commission rates
Two brokers agreeing to divide geographic territories
Advertising a standard market commission
Offering a discount to clients who waive inspections

Q133. Which disclosure must be provided at the first substantive dialogue about a transaction?

Seller’s Disclosure Notice
Consumer Protection Notice
Information About Brokerage Services (IABS)
Fair Housing Notice

Q134. A buyer is concerned about flooding in the area. What should the agent do?

Say it hasn’t flooded recently
Tell the buyer to ask the neighbors
Refer the buyer to FEMA flood maps or an insurance provider
Say that the seller has not disclosed anything

Q135. What type of listing agreement is least desirable for a broker?

Exclusive right to sell
Exclusive agency
Net listing
Open listing

Q136. Which action by a broker could be grounds for license revocation?

Delegating clerical work to an unlicensed assistant
Representing both parties with written consent
Paying a commission to an unlicensed person for procuring a client
Holding earnest money for the title company

Q137. A Texas sales agent negotiates directly with a seller about the listing price. What is the issue?

No issue if the broker is informed afterward
The agent is engaging in an unauthorized practice of real estate
Sales agents must work through or with the permission of their broker
TREC must approve such negotiations in writing

Q138. Which document is used to modify terms of an executed contract?

Amendment
Addendum
Disclosure
Counteroffer

Q139. How long must brokers retain transaction records?

One year
Two years
Three years
Five years

Q140. Which law prohibits discrimination based on familial status?

Equal Credit Opportunity Act
Americans with Disabilities Act
Fair Housing Act
Texas Property Code

Q141. What must a license holder do if sued for a real estate-related matter?

Notify their broker only
Notify TREC within 30 days
Respond only if found guilty
Do nothing unless fined

Q142. What does TREC require regarding team names in advertising?

They must include the word “team” or “group”
They must be registered with the local MLS
They can include “realty” or “broker” freely
No rules apply if part of a franchise

Q143. When is a license holder required to provide the IABS form in writing?

Before closing
At the time of listing
At first substantive communication about real estate services
Only when requested by the client

Q144. A license holder receives a referral fee from a title company. This is:

Legal if the broker approves
Illegal under RESPA
Allowed for leases only
Permissible if under $50

Q145. Which of the following requires a license in Texas?

Managing personal rental properties
Helping a friend sell their home for free
Selling properties for another person and earning compensation
Posting property listings on social media

Q146. If a license holder receives a complaint from TREC, they must:

Ignore it unless a fine is imposed
Respond in writing within the timeframe given
Discuss it with their broker only
Wait to see if further action is taken

Q147. What is the legal consequence of offering rebates without disclosure?

No consequence
Potential license suspension or fines
Required ethics training only
Referral to the attorney general

Q148. A broker fails to supervise sponsored agents properly. What is the result?

The agents are solely responsible
The broker may face disciplinary action
TREC will issue a warning only
There are no penalties for supervision issues

Q149. What is an “option fee” in a Texas real estate contract?

A penalty for canceling a contract
A payment to the seller for inspection rights
A deposit on the down payment
A bonus to the listing broker

Q150. A broker receives earnest money but does not deposit it. This is an example of:

Negligence
Conversion
Commingling
Delegation

Q151. Which of the following activities requires a Texas real estate license?

Advertising one’s own property for sale
Showing rental units as a salaried employee
Charging a friend a fee to negotiate their home purchase
Providing a market analysis for a neighbor for free

Q152. What is the primary function of the Texas Real Estate Commission (TREC)?

Collect state taxes
Promote the real estate profession
License and regulate real estate professionals
Represent licensees in legal disputes

Q153. What is the penalty for violating TREC advertising rules?

Immediate license revocation
A warning letter only
Up to a $5,000 administrative fine per day
Referral to a local board of REALTORS®

Q154. What does the term “conversion” mean in real estate practice?

Commingling funds
Delaying commission payments
Using client funds for personal use
Depositing earnest money late

Q155. What must an intermediary broker do to make appointments?

Get TREC approval
Have written consent from both parties
Obtain oral consent from buyer and seller
Assign the same agent to both parties

Q156. A license holder fails to renew their license on time. What happens?

A 90-day grace period applies automatically
The license expires and must be reinstated with penalties
The license remains active during renewal processing
They may continue practicing for 30 days

Q157. Who may maintain an escrow or trust account?

Any license holder
Brokers only
TREC staff
Unlicensed assistants under supervision

Q158. What must be done if a license holder receives a referral fee from a title company?

Report it to TREC
Share it with the client
Decline or disclose it in writing
Submit it to the broker

Q159. What is the statute of limitations for filing a complaint with TREC?

6 months
1 year
2 years
4 years

Q160. Which party typically pays for the survey in a Texas real estate transaction?

The buyer always
The seller always
It’s negotiated in the contract
TREC assigns the cost

Q161. What is the legal effect of a counteroffer in Texas real estate transactions?

It amends the original contract while keeping all other terms intact
It immediately binds the buyer to new terms
It terminates the original offer and creates a new one
It guarantees acceptance if within 72 hours

Q162. What is the primary purpose of errors and omissions (E&O) insurance for real estate professionals?

To protect clients against fraud
To cover intentional misrepresentation
To cover mistakes or negligence by the agent
To reimburse earnest money disputes

Q163. Which form is promulgated by TREC for use in residential resale transactions?

One to Four Family Residential Contract (Resale)
New Construction Contract
Lease with Option to Buy Form
Commercial Property Sales Contract

Q164. If a listing agent knows that the roof leaks but the seller does not disclose it, what must the agent do?

Remain silent if not directly asked
Encourage the buyer to hire an inspector
Disclose the known defect to the buyer
Ask the seller to fix it before closing

Q165. What is the role of a sponsoring broker in relation to their sales agents?

Acts as a silent business partner
Provides legal advice for contracts
Supervises and is responsible for the agents’ actions
Manages commission distribution for the title company

Q166. When must the IABS form be provided to a consumer?

At closing
Before showing any property
At the first substantive communication
After the buyer signs the sales contract

Q167. What does the term “fiduciary duty” mean in real estate?

The duty to market a property to the public
A legal obligation to act in another’s best interest
The responsibility to pay property taxes on time
The right to delegate contract signing

Q168. Which Texas law requires a license for managing or leasing real estate for others for compensation?

Texas Property Code
Texas Deceptive Trade Practices Act
Texas Real Estate License Act (TRELA)
Texas Administrative Code

Q169. If a broker deposits a client’s escrow funds into a business operating account, what violation has occurred?

Breach of loyalty
Commingling
Unauthorized compensation
Fraudulent inducement

Q170. What must be included in all advertising by a real estate license holder?

The sales price of the listing
The square footage of the property
The license holder’s name and brokerage name
The license number of the broker

Q171. What must be included in all advertising by a Texas real estate license holder?

The agent’s license number
A link to their personal website
The broker’s name in a prominent location
The name of their title company

Q172. What happens if a license holder fails to disclose a familial relationship in a transaction?

The transaction is automatically void
TREC may impose disciplinary action
The broker receives a warning
The title company handles the issue

Q173. A license holder tells a buyer that a property “will double in value in two years.” This is considered:

Legal puffing
An opinion, not actionable
A DTPA violation for misrepresentation
Encouraged marketing language

Q174. A broker’s assumed business name must be:

Registered with TREC before use
Used only in team branding
Approved by the local REALTOR® board
Shown only on websites

Q175. What is the effect of an option clause in a Texas residential contract?

It allows the buyer to cancel only if the inspection fails
It grants the buyer an unrestricted right to terminate within the option period
It ensures automatic refunds
It waives all seller disclosures

Q176. Which of the following is required in intermediary relationships?

Dual agency consent
Written consent from both parties
Verbal agreement from the broker
Third-party appointment by TREC

Q177. What is the TREC rule regarding earnest money deposit timelines?

It must be deposited within 24 hours
It must be delivered by 5:00 PM the next day
It must be delivered by the close of business on the third business day
It must be returned to the buyer automatically after 7 days

Q178. A broker appoints agents to represent the buyer and seller. This is:

Illegal dual agency
Properly executed intermediary with appointments
Prohibited unless both parties waive confidentiality
Allowed only in commercial transactions

Q179. What agency investigates complaints against real estate license holders in Texas?

Texas Real Estate Commission (TREC)
Department of Justice
Texas Association of REALTORS®
MLS Ethics Committee

Q180. What is the legal effect of an “as is” clause in a Texas residential contract?

It eliminates all seller liability
It protects the seller only if no fraud or misrepresentation occurred
It removes buyer inspection rights
It overrides statutory disclosure laws

Q181. A license holder tells a homeowner that “property values will fall due to the influx of minority families.” This is:

Blockbusting, which violates fair housing laws
Acceptable if the homeowner initiated the discussion
Legal if the market supports it
Protected as free speech

Q182. If a license holder fails to advise a client to obtain an attorney when appropriate, this may be considered:

Unauthorized practice of law
Due diligence
A minor infraction
Breach of fiduciary duty

Q183. A Texas license holder must respond to TREC inquiries within:

5 days
10 days
15 days
30 days

Q184. A broker appoints two license holders to represent buyer and seller in the same transaction. This is:

Dual agency
Intermediary with appointments
Prohibited under Texas law
Designated representation

Q185. Which of the following actions is most likely to be considered a deceptive trade practice?

Giving a seller’s contact information to a buyer
Telling a buyer the neighborhood is “very safe”
Failing to disclose a known roof defect
Refusing to negotiate the sales price

Q186. Who is legally responsible for ensuring advertising complies with TREC rules?

The license holder only
The team leader
The sponsoring broker
The buyer or seller

Q187. What must be true for a license holder to collect a commission on a real estate transaction?

The buyer must request it in writing
The agreement must be in writing and signed
The agent must hold a broker license
The seller must verbally agree before closing

Q188. When must the Information About Brokerage Services (IABS) form be delivered?

Prior to showing any property
At the time of contract execution
At the first substantive communication about a real estate transaction
When requested by a client

Q189. What is the primary purpose of the Texas Real Estate Recovery Trust Account?

To fund TREC’s operations
To pay commissions when brokers go bankrupt
To reimburse consumers harmed by license holder misconduct
To cover legal fees for license holders

Q190. An agent claims a property is “the best value in the city” without substantiation. This is considered:

An acceptable opinion
Puffery
Negligence
Fraud

Q191. What must be included in a property management agreement in Texas?

The manager’s social security number
A termination date and fee schedule
TREC approval
Broker’s bond guarantee

Q192. A license holder is sued for negligence. What should they do immediately?

Contact the buyer
Notify their broker and insurance carrier
Close any pending transactions
File a complaint with TREC

Q193. What must a license holder do before negotiating a second offer on a property already under contract?

Get permission from the title company
Terminate the first contract
Disclose the existing contract status to the second buyer
File a backup contract with TREC

Q194. What is the purpose of the Texas Real Estate Recovery Trust Account?

To compensate brokers who suffer losses
To fund continuing education programs
To reimburse consumers harmed by licensee misconduct
To offset court costs for license holders

Q195. What is an “option fee” in a Texas real estate contract?

A fee paid to extend the closing date
Non-refundable consideration for the option period
A deposit to secure earnest money
The broker’s commission hold

Q196. A license holder emails listing details to a buyer without the seller’s consent. What is this?

Acceptable under fair housing
A breach of confidentiality
Normal business practice
Mandatory disclosure

Q197. Which of the following acts may result in suspension or revocation of a license?

Working with both buyer and seller in different counties
Using misleading advertising without broker name
Paying a referral fee to another broker
Using TREC forms for all transactions

Q198. A license holder is found guilty of fraud in a civil lawsuit. What can TREC do?

Nothing—it’s a civil matter only
Suspend or revoke their license
Offer mediation services
Pay the buyer directly

Q199. How long must a broker retain files on completed real estate transactions?

1 year
3 years
4 years
7 years

Q200. Which of the following actions is considered commingling?

Depositing earnest money in the broker’s operating account
Paying commissions to another broker
Refunding excess escrow after closing
Holding earnest money in a title company trust account

Q201. What is required to establish an intermediary relationship in Texas?

Verbal agreement from both parties
Dual agency license endorsement
Written consent from both buyer and seller
Filing a form with TREC

Q202. What is the purpose of the Texas Real Estate Commission (TREC)?

To promote real estate investment
To assist brokers with marketing
To protect the public through licensing and regulation
To enforce federal real estate laws

Q203. Which of the following activities requires a real estate license in Texas?

Posting a rental on social media
Discussing market conditions at a party
Helping a neighbor find a buyer for compensation
Referring someone to a title company

Q204. What happens if a broker fails to properly supervise sponsored agents?

The broker may receive a warning letter
Only the agent is held accountable
The broker can face disciplinary action from TREC
No action unless a complaint is filed

Q205. When must the IABS form be delivered to a prospective client?

Before a showing
At the time of first substantial communication
When an offer is submitted
At closing

Q206. How should a license holder respond if they are asked to misrepresent a material fact?

Do so if the client insists
Disclose it only if discovered by the buyer
Refuse and advise the client of legal risks
Tell the client it’s common in the industry

Q207. What is the penalty per violation per day for violating the Texas Real Estate License Act?

$500
$1,000
$5,000
$10,000

Q208. Which of the following is NOT a protected class under the federal Fair Housing Act?

Race
National origin
Age
Religion

Q209. What must a license holder do if convicted of a felony?

Report it to their broker only
Report it to TREC within 30 days
Disclose it at renewal
Notify the local association

Q210. Which Texas law prohibits misrepresentation and fraud in business practices?

Texas Fair Housing Act
Texas Consumer Credit Code
Texas Deceptive Trade Practices Act
Texas Insurance Code

Q211. A seller’s disclosure notice in Texas is required for which of the following property types?

A new home never occupied
A property transferred between spouses
A single-family home sold through a broker
A foreclosure sale by a lender

Q212. Which of the following may TREC NOT do when disciplining a license holder?

Revoke the license
Require restitution to a consumer
Issue a reprimand
Impose an administrative penalty

Q213. A broker has multiple offers on a listing. What must they do?

Present only the highest offer
Present all offers to the seller promptly
Wait for the seller to ask for more offers
Keep backup offers secret until the first one fails

Q214. Which Texas law requires that real estate advertisements avoid misleading content?

Texas Deceptive Trade Practices Act (DTPA)
Federal Trade Commission Act
Texas Residential Property Disclosure Act
Sherman Antitrust Act

Q215. What is the primary role of the Texas Real Estate Commission (TREC)?

Represent real estate agents in court
Create financing programs for first-time buyers
License and regulate real estate professionals
Set property tax rates in each county

Q216. A real estate team name must include which of the following under TREC rules?

The word “agency” to indicate brokerage
The individual agent’s license number
The word “team” or “group” clearly in the name
The phone number of the sponsoring broker

Q217. A sponsoring broker must maintain written policies that cover:

Office dress codes and personal hygiene
Compensation limits for all agents
Agency procedures, recordkeeping, and advertising
Travel reimbursement procedures

Q218. Which party typically orders the title insurance policy in Texas?

The buyer’s attorney
The seller’s broker
The escrow officer or title company
The mortgage lender

Q219. Which of the following is required to lawfully terminate a listing agreement early in Texas?

Written mutual agreement of both parties
Verbal notice to the broker
Expiration of the listing term
Buyer’s written offer

Q220. If a buyer terminates the contract during the option period, what is the status of the earnest money?

It’s forfeited to the seller
It’s refunded to the buyer
It’s split evenly between parties
It’s applied to closing costs

Q221. What must a license holder do before placing a sign on a property?

Notify the seller’s attorney
Get written permission from the owner
Wait until the listing appears on MLS
Call the city zoning office

Q222. Under what condition may a broker release escrow funds without mutual agreement of the parties?

If instructed by their sponsoring agent
If the transaction has exceeded 90 days with no closing
If ordered by a court or upon interpleading
If the buyer provides written notice of termination

Q223. A license holder is convicted of a felony. What is the immediate consequence?

Their license is automatically revoked
TREC suspends their license pending review
No impact unless it was real estate-related
They are fined but can continue working

Q224. What version of the Consumer Protection Notice must be displayed as of 2025?

CN 1-4
CN 1-3
CN 1-5
CN 2-1

Q225. What is the penalty for practicing real estate without a license in Texas?

$500 civil penalty only
Class C misdemeanor
Class A misdemeanor and possible civil penalties
Suspension of future license eligibility

Q226. If a broker allows an unlicensed person to perform brokerage activities, the broker:

Is not liable if unaware
Must immediately report the person to TREC
May be disciplined by TREC for aiding unlicensed activity
Is exempt if the person is a family member

Q227. A broker receives trust funds and places them in a personal account temporarily. What is this called?

Conversion
Interpleading
Commingling
Escrow accounting

Q228. What is the term for encouraging a property owner to sell based on changes in neighborhood demographics?

Steering
Channeling
Blockbusting
Redlining

Q229. What is required for a broker to maintain a trust account?

Monthly audits by TREC
Written notice to clients and proper account setup
Use of an escrow company instead
Appointment of a financial officer

Q230. Which of the following must a broker maintain as part of supervisory duties?

Weekly in-person team meetings
A written policies and procedures manual
Monthly performance evaluations
Separate office leases for each agent

Q231. A license holder changes their name. What must they do?

Nothing unless their address also changes
Notify their broker within 30 days
Submit a name change request to TREC
Update the MLS and business cards

Q232. What is the effect of failing to deliver the IABS form when required?

Minor infraction with no penalty
A potential violation of TREC rules
Automatic revocation of license
Disqualification from intermediary status

Q233. If a broker terminates sponsorship of a sales agent, what happens?

The agent is suspended automatically
The agent may continue practicing independently
The agent’s license becomes inactive
TREC assigns the agent to another broker

Q234. A license holder refers a client to a title company in exchange for a gift card. Is this allowed?

Yes, if disclosed in writing
Yes, as long as the title company is licensed
No, it violates RESPA
No, unless approved by the broker

Q235. What must a broker do when ceasing operations?

Notify all clients and agents in writing
Inform the MLS within 7 days
Notify TREC and return the broker’s license certificate
Conduct a public notice in the local newspaper

Q236. What must be included on a license holder’s website?

Licensee’s full name and home address
Broker’s license number
A link to the Consumer Protection Notice and IABS form
Copies of all active listings

Q237. When acting as an intermediary, what is the broker prohibited from doing?

Assigning agents to both buyer and seller
Remaining neutral in negotiations
Disclosing confidential information without permission
Explaining contract terms to the client

Q238. A license holder fails to supervise an unlicensed assistant. Who is liable?

The assistant only
TREC
The license holder and their broker
No one unless a complaint is filed

Q239. What is the primary duty of a license holder under TREC’s Canons of Professional Ethics?

To the public
To their broker
To the client
To the MLS

Q240. A buyer’s agent receives compensation from both buyer and seller. What must happen?

Nothing, this is allowed under dual agency
The broker must hold both payments in escrow
The buyer must sign a dual compensation waiver
Both parties must consent in writing

Q241. What is the consequence if a license holder fails to complete continuing education (CE) before renewal?

A 6-month grace period is granted
The license is placed on inactive status automatically
The license expires and must be reinstated
No consequence until the next renewal cycle

Q242. Which of the following statements about earnest money is TRUE in Texas?

It must be delivered to the title company within 48 hours
It is optional and not addressed in contracts
It must be delivered by the third business day after the effective date
It must be refunded immediately upon termination

Q243. What is required when using the term “REALTOR®” in advertising?

The agent must be a member of a local board and NAR
The agent must display their license number
The agent must include TREC’s Consumer Notice
Nothing—any licensee may use the term

Q244. Who is responsible for ensuring a sales agent complies with advertising rules?

The local REALTOR® board
The sales agent only
The sponsoring broker
TREC’s marketing division

Q245. What is required when a license holder receives an offer on a listing?

Present it only if it’s in writing
Present all offers promptly, even if lower than others
Wait for multiple offers before presenting
Only present the highest offer

Q246. How is a net listing defined in Texas real estate?

A listing where the agent receives a fixed fee
A listing where the seller receives a guaranteed minimum amount and the broker keeps the excess
A listing requiring no seller signature
An agreement used only for commercial properties

QQ247. Which activity by a license holder constitutes an antitrust violation?

Refusing to co-op with another agent
Discussing commission rates at a local association meeting
Splitting commission with another licensed broker
Declining to represent both parties in a transaction

Q248. A buyer backs out of a contract during the option period. What must the seller do to retain the option fee?

Sign a cancellation agreement
Request a formal termination letter
Do nothing; the seller keeps the option fee by default
Provide a signed release of earnest money

Q249. Which type of listing agreement is considered potentially unethical unless safeguards are used?

Net listing
Exclusive agency
Open listing
Exclusive right to sell

Q250. When may a license holder use the term “REALTOR®” in advertising?

When licensed by TREC
When employed by a broker who is a REALTOR®
Only if the license holder is an active member of NAR
If the brokerage is a member of the MLS

Q251. What is the penalty for engaging in real estate brokerage without a license in Texas?

$500 fine
Cease and desist letter only
Class A misdemeanor and administrative penalty
License suspension

Q252. What is the maximum amount a consumer may recover per judgment from the Real Estate Recovery Trust Account?

$25,000
$50,000
$75,000
$100,000

Q253. Which of the following is an example of illegal commingling?

Putting personal funds into a business account
Depositing client funds into a personal account
Mixing client funds with escrow account funds
Keeping separate accounts for different clients

Q254. What action must a license holder take when a client asks about local crime rates?

Provide the latest police report
Offer personal opinions about neighborhood safety
Direct the client to local law enforcement or official crime data sources
State they are not allowed to answer

Q255. A buyer terminates a contract during the option period. What happens to the option fee?

Refunded to the buyer
Retained by the seller
Split with the broker
Applied to closing costs

Q256. How many hours of CE are required for license renewal in Texas?

8 hours
10 hours
15 hours
18 hours

Q257. How long must a broker maintain transaction records?

1 year
2 years
3 years
5 years

Q258. A license holder fails to respond to a TREC complaint notice. What is the consequence?

A fine of up to $500
Suspension or revocation of license
Mandatory CE course
Nothing unless a second notice is missed

Q269. What must a license holder do before offering a guaranteed buyout to a seller?

Obtain permission from the buyer
Register the guarantee with TREC
Make full written disclosure and have funds to fulfill the offer
File a special form with the escrow agent

Q260. Which of the following may result in license revocation even if the conduct occurred outside of a real estate transaction?

Failing to respond to client emails
Committing a felony unrelated to real estate
Declining a buyer request to waive inspections
Advertising without using MLS

Q261. Which of the following would be considered commingling?

Depositing earnest money into the broker’s personal account
Holding client funds in a trust account
Paying office rent from business earnings
Placing broker funds into the trust account for accounting purposes

Q262. What action by a license holder is most likely to be considered conversion?

Failing to deposit earnest money
Withdrawing funds from escrow for personal use
Accepting a bonus check from a client
Forgetting to return a phone call

Q263. What happens if a broker fails to properly supervise sponsored agents?

Nothing unless a complaint is filed
The broker may be held liable for their actions
TREC will suspend the agents
Only the agents are disciplined

Q264. What is required for a license holder to receive compensation from a transaction?

Verbal agreement with a client
Broker approval and a written agreement
Listing with MLS only
Completion of CE hours

Q265. Which of the following forms is required for all license holders to use when representing clients in residential sales?

TAR Buyer Representation Form
TREC 1–4 Family Residential Contract
Broker Compensation Agreement
Texas Homestead Affidavit

Q266. If a license expires due to CE noncompliance, what must be done to reinstate it?

Submit a letter of apology to TREC
Reapply and retake the exam
Complete required CE and pay the reinstatement fee
Wait six months

Q267. What must a license holder do when representing their own property in a sale?

Disclose their status to TREC only
Avoid disclosure to avoid bias
Disclose their license status in writing to all parties
Use a third-party intermediary

Q268. What is the role of the Texas Real Estate Broker-Lawyer Committee?

Enforces licensing rules
Reviews license applications
Drafts and revises contract forms
Conducts CE courses

Q269. What is required before a broker may act as an intermediary?

Written consent from at least one party
Oral disclosure at first contact
Written consent from both buyer and seller
Appointment by the MLS

Q270. What should a license holder do if a client discloses they intend to break fair housing laws?

Report the client to HUD
Immediately withdraw from representation
Follow instructions but note it in writing
Proceed cautiously and consult legal counsel

Q271. What duty does a license holder owe when presenting multiple offers to a seller client?

To present only the most competitive offer
To rank the offers by price and present the list
To present all offers objectively and promptly
To advise the seller which offer to accept

Q272. Which of the following is considered an illegal rebate under Texas law?

A discount offered to a buyer at closing and disclosed to all parties
A gift card given secretly to a referring client
A brokerage fee discount advertised on social media
A broker rebate paid by check and recorded on the settlement statement

Q273. What is a license holder required to do if they receive a complaint notice from TREC?

Respond within 14 days
Ignore it unless legal action follows
Immediately cease all real estate activity
Contact the buyer or seller to resolve it informally

Q274. Which of the following is a legal activity by a licensed sales agent?

Paying another sales agent directly for a referral
Holding escrow funds in their personal bank account
Advising a client to consult an attorney for legal questions
Negotiating a commission with a buyer without broker involvement

Q275. What is the definition of “negligence” in a real estate context?

Intentional misrepresentation
Fraudulent concealment
Failure to use reasonable care resulting in harm
Providing legal advice without a license

Q276. Which entity has the authority to adopt and enforce rules for Texas real estate license holders?

Texas Department of Insurance
State Bar of Texas
Texas Real Estate Commission
Texas Association of Realtors

Q277. How long does a license applicant have to pass the exam after filing their application with TREC?

3 months
6 months
12 months
24 months

Q278. What is the status of an offer if the buyer dies before the seller accepts?

It remains valid unless revoked
It automatically terminates
The buyer’s heirs may enforce it
The listing broker may proceed

Q279. What is the effect of failing to display the Consumer Protection Notice on a licensee’s website?

It results in a warning only
It is a violation subject to disciplinary action
It is acceptable if displayed in office
TREC will send a compliance reminder

Q280. Which of the following is a valid reason for TREC to deny a license application?

The applicant had a prior bankruptcy
The applicant failed the exam once
The applicant was convicted of fraud five years ago
The applicant had no prior real estate experience

Q281. A license holder posts a listing on social media with only their team name. What is this a violation of?

MLS policy
Fair Housing laws
TREC advertising rules
NAR Code of Ethics

Q282. What is the effect of a buyer waiving the option period in the contract?

They lose the right to terminate for any reason
They still have 7 days to inspect the property
They are entitled to an automatic price reduction
The contract is canceled automatically

Q283. What is the purpose of the earnest money deposit?

To pay the buyer’s agent commission
To fund the buyer’s closing costs
To demonstrate the buyer’s serious intent to follow through on the purchase
To reimburse the seller’s inspection expenses

Q284. What happens if a license holder fails to renew their license within two years of expiration?

They must pay a double penalty fee
They may not renew and must reapply as a new applicant
They must appeal to the Texas Real Estate Commission
They automatically receive a provisional license

Q285. What is a broker’s supervisory obligation regarding sponsored agents?

Only reviewing contract paperwork
Approving advertising and ensuring compliance with laws
Setting commission rates
Assigning clients directly

Q286. What type of legal description provides the most accuracy?

Street address
Lot and block from a recorded plat
Informal neighborhood name
Listing agreement summary

Q287. When must the lead-based paint disclosure be provided in a residential transaction?

At closing
Before the buyer signs the contract
After the inspection is complete
When the appraisal is ordered

Q288. Which document outlines the buyer’s and seller’s rights and obligations in a resale home sale?

Deed of trust
General warranty deed
One to Four Family Residential Contract (Resale)
Closing disclosure

Q289. A sales agent wants to operate under a team name. What must be done first?

Get approval from the local board of REALTORS®
Register the team name with the Secretary of State
Register the team name with TREC under their sponsoring broker
Nothing — team names are not regulated

Q290. When must the Information About Brokerage Services (IABS) form be posted on a license holder’s website?

Only if the agent does not use a business card
If the website includes listings or contact forms
Only on broker-managed sites
Not required if the broker uses social media instead

Q291. What should a license holder do when faced with a client request that violates Fair Housing laws?

Notify the client that it may slow the sale process
Follow instructions but document the request
Decline the request and educate the client on the law
Refer the client to another agent

Q292. What must a broker do before changing their business entity’s address?

Submit a written request to the local board
Update the TREC licensing portal within 10 days
Send a certified letter to the Texas Secretary of State
Notify all current clients by mail

Q293. Which TREC form replaced the outdated Consumer Protection Notice CN 1-4?

CN 1-3
CN 1-5
CN 2-1
CN 1-6

Q294. What happens if a license holder fails to designate a business entity broker for their LLC?

Nothing unless the LLC closes a transaction
The LLC may not engage in brokerage activity
TREC will automatically assign a broker of record
The LLC is exempt if it has fewer than three members

Q295. If a license holder is found guilty of a serious violation, what can TREC do?

Refer the case to a local REALTOR® board
Suspend or revoke the license
Require the broker to change offices
Issue a buyer refund directly

Q296. Which of the following is a duty of a broker under the Real Estate License Act?

Provide legal advice to clients
Monitor all real estate advertising personally
Supervise sponsored sales agents
Appoint lawyers to interpret contracts

Q297. A license holder represents a buyer in a transaction and also owns the property being sold. What must they do?

Disclose their dual role in writing to all parties
Submit an appraisal before listing
Use an attorney to represent both sides
Inform TREC and wait for approval

Q298. A license applicant is denied due to moral character concerns. How long must they wait before reapplying?

90 days
1 year
2 years
There is no waiting period

Q299. What action is required of a broker when terminating sponsorship of a sales agent?

Mail a notice to the agent
Notify TREC in writing immediately
File a disassociation form within 10 days
Wait until the agent finds another sponsor

Q300. A license holder acts negligently in a transaction, causing financial harm to the buyer. What is the buyer’s recourse?

File a grievance with the MLS
File a claim through the Texas Real Estate Recovery Trust Account
Submit a refund request to TREC
Seek payment from the broker’s E&O insurance directly

error: Content is protected !!