Texas Sales Agent Real Estate Examination – HTML (2026)

Texas Real Estate Practice Test

Texas Sales Agent Real Estate Examination – HTML (2026) covers Texas real estate practice exam for 2026 using exam-style multiple-choice questions with a “Show Answer” toggle for review. Each item includes the correct answer, a concise explanation, and official citations where applicable so you can verify the underlying Texas rule quickly. Use it to drill agency duties, contracts, finance basics, and Texas-specific practice details that tend to show up in short scenario wording.

FAQ

What should I focus on first in a Texas real estate exam study guide?

Start with the state outline, then prioritize agency relationships, contracts, fair housing, and finance basics. Practice in mixed sets so you learn how Texas exam wording tests one rule and its exception in short scenarios.

What are the Texas real estate sales agent license requirements?

Texas licensing typically requires eligibility, required pre-licensing education, passing the exam, and applying through TREC. Confirm current requirements, fees, and documentation directly with TREC before scheduling.

What topics are tested on the Texas real estate sales agent exam?

Expect ownership and transfer basics, agency duties, contracts, finance/valuation concepts, plus Texas-specific practice rules. Use explanations to identify the tested rule, then retake missed concepts later in fresh scenario wording.

Where can I take a Texas real estate practice test that matches the exam format?

Choose a practice test with realistic distractors and scenario stems. Commit to an answer, then use “Show Answer” to confirm the rule and your mistake. Retake missed topics after a short gap for real recall.

What is the most efficient way to prepare for the Texas real estate exam?

Do one pass through the outline, then practice in full mixed runs. Track misses by topic, confirm the cited rule when available, and retake later. Aim to explain why distractors fail under the rule.

<h2>Texas Sales Agent Real Estate Practice Examination</h2>

Texas Sales Agent Real Estate Practice Examination

Q1. What is the primary purpose of the Texas Real Estate Commission (TREC)?
Correct Answer: C
Explanation: TREC’s mission is to protect the public by enforcing Texas real estate laws and ethical standards.
Citation: Texas Occupations Code §1101.051
Q2. What is the purpose of the Texas Real Estate Recovery Trust Account?
Correct Answer: B
Explanation: The Recovery Trust Account allows consumers to recover damages when a license holder acts dishonestly or fraudulently and other remedies are unavailable.
Citation: Texas Occupations Code §1101.603
Q3. Which of the following actions requires a real estate license in Texas?
Correct Answer: B
Explanation: Acting on behalf of another for compensation in a real estate transaction requires licensure.
Citation: Texas Occupations Code §1101.002
Q4. How long must brokers retain transactional records in Texas?
Correct Answer: C
Explanation: Brokers are required to keep transactional records for four years from the date of closing or termination.
Citation: TREC Rule §535.2(i)(2)
Q5. What must a license holder do if convicted of a felony?
Correct Answer: B
Explanation: License holders must notify TREC within 30 days of any felony conviction or plea of guilty/no contest.
Citation: TREC Rule §535.91(a)(2)
Q6. When must a license holder provide the Information About Brokerage Services (IABS) form?
Correct Answer: B
Explanation: The IABS form must be provided at the first substantive communication regarding a real estate transaction.
Citation: TREC Rule §531.20
Q7. Which of the following best describes an intermediary relationship?
Correct Answer: B
Explanation: An intermediary occurs when one broker represents both sides of a transaction, under specific disclosure and consent conditions.
Citation: Texas Occupations Code §1101.559
Q8. What is the consequence of practicing real estate without a license in Texas?
Correct Answer: B
Explanation: TREC may assess administrative penalties of up to $5,000 per day for unlicensed real estate activity.
Citation: Texas Occupations Code §1101.758
Q9. What is required for a broker to sponsor a sales agent?
Correct Answer: B
Explanation: A broker must officially sponsor a sales agent by filing with TREC and taking responsibility for the agent’s actions.
Citation: TREC Rule §535.2(a)
Q10. What must be included in all real estate advertising?
Correct Answer: C
Explanation: Texas requires all real estate advertising to clearly identify the license holder and the sponsoring broker.
Citation: TREC Rule §535.154(c)
Q11. What is required for a valid intermediary relationship in Texas?
Correct Answer: B
Explanation: A broker may act as an intermediary only with the written consent of both the buyer and seller, usually through the listing and buyer representation agreements.
Citation: Texas Occupations Code §1101.559
Q12. Who may maintain a trust account in a real estate brokerage?
Correct Answer: C
Explanation: Only the sponsoring broker or a designated associate broker is permitted to maintain and manage a trust account.
Citation: TREC Rule §535.146(c)
Q13. Which of the following is considered commingling of funds?
Correct Answer: C
Explanation: Commingling occurs when a broker mixes client funds with business or personal funds. Client money must be kept in a separate trust account.
Citation: TREC Rule §535.146(b)(2)
Q14. Which document notifies consumers that a real estate license holder is regulated by TREC?
Correct Answer: B
Explanation: The Consumer Protection Notice (Form CN 1-5) must be made available to all clients and discloses that the licensee is regulated by TREC.
Citation: TREC Rule §531.18
Q15. What is the maximum administrative penalty TREC may impose per violation per day?
Correct Answer: C
Explanation: TREC may assess an administrative penalty of up to $5,000 per violation per day under the Texas Occupations Code.
Citation: Texas Occupations Code §1101.701(b)
Q16. A license holder places a “For Sale” sign on a property without permission. What rule is being violated?
Correct Answer: B
Explanation: A license holder must obtain the written consent of the property owner before placing any sign on the property.
Citation: TREC Rule §535.154(a)(6)
Q17. What is required in all advertisements by a license holder?
Correct Answer: C
Explanation: Advertising must include the name of the license holder and the name of the sponsoring broker, clearly identifying both parties.
Citation: TREC Rule §535.154(c)
Q18. What happens to a license if continuing education is not completed by the renewal deadline?
Correct Answer: C
Explanation: If a license holder fails to complete CE before the expiration date, the license becomes inactive and cannot be used until reinstated.
Citation: TREC Rule §535.92(f)
Q19. Which action would violate the Fair Housing Act?
Correct Answer: B
Explanation: Making statements designed to induce panic selling based on race is a form of blockbusting, which violates the Fair Housing Act.
Citation: 42 U.S.C. §3604(e)
Q20. Which of the following would be considered a misleading advertisement?
Correct Answer: B
Explanation: Any advertising claim must be accurate and verifiable. Claiming to be a “Top Producer” without records is considered misleading.
Citation: TREC Rule §535.155(b)(1)
Q21. How many hours of continuing education (CE) are required for license renewal in Texas?
Correct Answer: D
Explanation: License holders must complete 18 hours of CE plus 6 hours of Legal Update (I and II) courses, totaling 24 hours.
Citation: TREC Rule §535.92(a)
Q22. What must a broker do before sponsoring a new sales agent?
Correct Answer: C
Explanation: A broker must formally sponsor a sales agent by submitting a request to TREC and assuming responsibility for the agent’s conduct.
Citation: TREC Rule §535.2(a)
Q23. What must a license holder do if they are found guilty of a felony?
Correct Answer: C
Explanation: License holders must notify TREC in writing within 30 days of any felony conviction, plea of guilty, or no contest.
Citation: TREC Rule §535.91(a)(2)
Q24. If a broker fails to properly supervise sponsored sales agents, what could TREC do?
Correct Answer: C
Explanation: A broker is responsible for the conduct of all sponsored agents and may be disciplined for failing to supervise properly.
Citation: Texas Occupations Code §1101.652(b)(1)
Q25. What is the earliest point a license holder can lawfully present the IABS form to a prospective buyer?
Correct Answer: C
Explanation: The IABS form must be provided at the first substantive dialogue about a specific real estate transaction, not just a casual conversation.
Citation: TREC Rule §531.20
Q26. A license holder refers a buyer to a title company and receives a fee. What law does this potentially violate?
Correct Answer: A
Explanation: Under RESPA, referral fees or kickbacks for recommending a settlement service provider are prohibited.
Citation: 12 U.S.C. §2607(a)
Q27. What must a license holder include when advertising their services on social media?
Correct Answer: B
Explanation: Any advertisement, including those on social media, must include the name of the license holder’s sponsoring broker.
Citation: TREC Rule §535.154(d)
Q28. Which of the following actions is considered an unlawful practice of law?
Correct Answer: C
Explanation: Modifying contract forms in a way that changes legal rights or obligations constitutes the unauthorized practice of law.
Citation: TREC Rule §537.11(b)
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?
Correct Answer: C
Explanation: All offers must be presented to the seller, regardless of verbal instructions from the buyer’s agent to withhold.
Citation: TREC Rule §535.156(b)
Q30. When can a license holder legally offer a rebate to a buyer?
Correct Answer: B
Explanation: License holders may offer rebates to buyers as long as they are not tied to any unlawful activity or future performance requirements.
Citation: TREC Rule §535.147(e)
Q31. When must a license holder disclose that they are a principal in a transaction?
Correct Answer: B
Explanation: A license holder must disclose in writing if they are a party to the transaction or have a financial interest, to avoid conflicts of interest.
Citation: TREC Rule §535.144(b)
Q32. What is the purpose of TREC promulgated forms?
Correct Answer: B
Explanation: Promulgated forms ensure consistency and legality across transactions, protecting consumers and license holders alike.
Citation: TREC Rule §537.11(a)
Q33. When may a license holder act as an intermediary without appointments?
Correct Answer: A
Explanation: If the broker is the only person representing both parties, they may act as intermediary without appointments, with proper disclosure and consent.
Citation: Texas Occupations Code §1101.560
Q34. A sales agent wants to advertise a property. What must they include in the ad?
Correct Answer: C
Explanation: Any advertisement must include the name of the sponsoring broker in a readily noticeable format.
Citation: TREC Rule §535.154(d)(1)
Q35. Which of the following activities requires a real estate license in Texas?
Correct Answer: C
Explanation: Anyone negotiating real estate sales or leases for compensation must be licensed under Texas law.
Citation: Texas Occupations Code §1101.002(1)(A)
Q36. A license holder receives a commission from a broker who is not their sponsor. What is this called?
Correct Answer: C
Explanation: A license holder may only receive compensation through their sponsoring broker. Receiving money from another broker directly is a violation.
Citation: Texas Occupations Code §1101.651(d)
Q37. A broker acts negligently, causing a client financial harm. What can the client do?
Correct Answer: B
Explanation: The Recovery Trust Account provides financial relief to clients harmed by the dishonest or negligent conduct of license holders.
Citation: Texas Occupations Code §1101.603
Q38. What must a license holder do before placing a sign on a seller’s property?
Correct Answer: C
Explanation: TREC rules require that license holders receive the owner’s written consent before placing a sign on the property.
Citation: TREC Rule §535.154(a)(6)
Q39. What is the broker’s responsibility for trust account reconciliations?
Correct Answer: B
Explanation: Brokers who maintain trust accounts must reconcile them monthly to ensure proper accounting of all client funds.
Citation: TREC Rule §535.146(c)(7)
Q40. Which transaction type does NOT require the use of a TREC‐promulgated form?
Correct Answer: C
Explanation: TREC‐promulgated forms are required primarily for residential sales; commercial transactions are not required to use them.
Citation: Texas Occupations Code §537.11(a)
Q41. A buyer wants to waive the appraisal contingency. What must be true for this to be valid?
Correct Answer: B
Explanation: Waiving any contingency must be done voluntarily, knowingly, and in writing to ensure enforceability.
Citation: TREC Form 20-16, Paragraph 23
Q42. What is the function of the Texas Real Estate Broker‐Lawyer Committee?
Correct Answer: B
Explanation: This committee is responsible for drafting and revising forms used by license holders in real estate transactions.
Citation: Texas Occupations Code §1101.252
Q43. What must a license holder do before negotiating the sale of their own property?
Correct Answer: C
Explanation: License holders must disclose in writing their license status when they are a party to the transaction, to avoid misleading the other party.
Citation: TREC Rule §535.144(b)
Q44. What action can TREC take if a license holder violates a Commission rule?
Correct Answer: C
Explanation: TREC has the authority to take disciplinary actions including suspension, revocation, and imposing fines for rule violations.
Citation: Texas Occupations Code §1101.701
Q45. What must a license applicant provide as part of the background check process?
Correct Answer: B
Explanation: All applicants must submit fingerprints for a criminal background check through the Department of Public Safety.
Citation: Texas Occupations Code §1101.3521
Q46. A license holder wants to use a net listing agreement. Under what condition is this permitted?
Correct Answer: D
Explanation: Net listings are legal in Texas but are discouraged and allowed only when the principal is fully informed of the property’s market value.
Citation: TREC Rule §535.16(d)
Q47. Which of the following actions is prohibited under the Canons of Professional Ethics?
Correct Answer: C
Explanation: License holders must avoid practicing law, including giving legal advice to any party in a transaction.
Citation: TREC Rule §531.2
Q48. What must be true for a buyer to terminate under the option clause of a residential sales contract?
Correct Answer: B
Explanation: The buyer has the unrestricted right to terminate the contract within the option period as long as written notice is provided.
Citation: TREC Form 20-16, Paragraph 23
Q49. A license holder collects an earnest money check but delays delivery to the escrow agent. What is this?
Correct Answer: B
Explanation: Earnest money must be delivered to the escrow agent by the close of the second working day after execution of the contract.
Citation: TREC Rule §535.146(d)
Q50. What happens if a license holder engages in fraud or misrepresentation?
Correct Answer: A
Explanation: TREC has the authority to suspend or revoke a license for acts of fraud, dishonesty, or misrepresentation during real estate practice.
Citation: Texas Occupations Code §1101.652(b)(1)
Q51. What must a Texas license holder do before placing a sign on a property for sale?
Correct Answer: C
Explanation: A license holder must obtain the written consent of the property owner before placing a sign on their property.
Citation: TREC Rule §535.155(d)(7)
Q52. When representing both parties in a transaction under intermediary status, the broker must:
Correct Answer: C
Explanation: A broker acting as an intermediary without appointments must remain impartial and cannot favor one party over the other.
Citation: Texas Occupations Code §1101.559
Q53. What is the primary purpose of the Real Estate License Act in Texas?
Correct Answer: C
Explanation: The Real Estate License Act (RELA) was created to safeguard the public by setting education, experience, and conduct standards for licensees.
Citation: Texas Occupations Code §1101.001
Q54. Which of the following must be included in all email advertising by Texas license holders?
Correct Answer: C
Explanation: All email communications used to advertise must identify the sender as a license holder and include the broker’s or team’s name.
Citation: TREC Rule §535.155(d)(1)
Q55. How soon must earnest money be delivered to the escrow agent after contract execution in Texas?
Correct Answer: B
Explanation: Texas contracts require that earnest money be delivered to the escrow agent by the end of the third business day after execution.
Citation: TREC 1–4 Family Residential Contract Paragraph 5
Q56. When must a license applicant disclose a prior criminal conviction to TREC?
Correct Answer: C
Explanation: All prior convictions must be disclosed to TREC on the application, even if they were misdemeanors or occurred long ago.
Citation: TREC Rule §541.1
Q57. What is the consequence if a license holder misrepresents a material fact to a buyer?
Correct Answer: B
Explanation: Misrepresentation of material facts is a serious offense and can lead to civil lawsuits and disciplinary action from TREC.
Citation: Texas Business and Commerce Code §17.46 (DTPA)
Q58. What is an unlicensed assistant in Texas prohibited from doing?
Correct Answer: B
Explanation: Unlicensed assistants may not interpret, explain, or negotiate contracts or terms with clients, which is considered practicing real estate.
Citation: TREC Rule §535.4(g)
Q59. What must be done if a license holder changes their business address?
Correct Answer: C
Explanation: License holders must update any change of address through the TREC online system within 10 days of the change.
Citation: TREC Rule §535.91(a)(1)
Q60. A license holder tells a buyer the property has “no foundation issues,” despite cracks in the slab. This is an example of:
Correct Answer: B
Explanation: Knowingly misrepresenting the condition of a property constitutes fraud, which is grounds for disciplinary action and civil liability.
Citation: Texas Business and Commerce Code §17.46(b)(2)
Q61. What must a broker do if they learn a sponsored agent has violated TREC rules?
Correct Answer: C
Explanation: A sponsoring broker is required to maintain supervision and take corrective action if a sponsored agent violates laws or rules.
Citation: TREC Rule §535.2(i)
Q62. What is the maximum administrative penalty TREC may impose per violation?
Correct Answer: D
Explanation: TREC may impose an administrative penalty of up to $5,000 per day per violation, depending on the nature of the offense.
Citation: Texas Occupations Code §1101.701(b)
Q63. What is a license holder’s obligation regarding third-party services offered to clients?
Correct Answer: B
Explanation: If the license holder receives compensation or has an interest in a referred third-party service, this must be disclosed to the client in writing.
Citation: TREC Rule §535.148(b)
Q64. A broker allows an unlicensed assistant to host an open house. What is the result?
Correct Answer: C
Explanation: Hosting open houses is a licensed activity. Allowing an unlicensed individual to conduct one is a clear violation of TREC rules.
Citation: TREC Rule §535.4(g)
Q65. When must a license holder provide the Consumer Protection Notice to the public?
Correct Answer: C
Explanation: The Consumer Protection Notice must be accessible to the public in the office and posted on the license holder’s business website.
Citation: TREC Rule §531.18
Q66. What is considered commingling of funds?
Correct Answer: C
Explanation: Commingling is the improper mixing of client money with personal or business funds and is a serious violation.
Citation: TREC Rule §535.146(b)(2)
Q67. What is the term for a situation in which one broker represents both the buyer and seller in a transaction?
Correct Answer: C
Explanation: Texas does not allow dual agency. Instead, brokers may act as intermediaries with the consent of both parties.
Citation: Texas Occupations Code §1101.558
Q68. A license holder receives a trust check but delays depositing it. What is this called?
Correct Answer: C
Explanation: Conversion is the use or withholding of funds that should be in trust. Failing to deposit them as required qualifies.
Citation: TREC Rule §535.146(b)(1)
Q69. When is it acceptable for a license holder to use a form drafted by their attorney?
Correct Answer: A
Explanation: License holders may use a form prepared by a Texas attorney only if no TREC-promulgated form exists for the transaction.
Citation: TREC Rule §537.11(a)
Q70. A license holder fails to inform a buyer about a known roof leak. What is this an example of?
Correct Answer: A
Explanation: Failure to disclose a known material defect constitutes fraud by omission, which can result in liability under DTPA and TREC rules.
Citation: Texas Business and Commerce Code §17.46(b)(23)
Q71. What is the legal effect of a contract signed by a minor in a real estate transaction?
Correct Answer: C
Explanation: Contracts signed by minors are considered voidable. The minor may choose to honor or rescind the agreement.
Citation: Texas Contract Law (General Rule on Capacity)
Q72. What does the term “steering” refer to in real estate?
Correct Answer: C
Explanation: Steering is an illegal practice under the Fair Housing Act where agents influence a buyer’s location decision based on race, religion, or other protected traits.
Citation: 42 U.S.C. §3604
Q73. A license holder tells a seller not to disclose prior flooding because “it could hurt the sale.” This is:
Correct Answer: C
Explanation: Advising a client to withhold material facts like flooding is deceptive and violates both TREC ethics and the Texas Deceptive Trade Practices Act.
Citation: Texas Business and Commerce Code §17.46
Q74. What is the effect of an “as is” clause in a Texas real estate contract?
Correct Answer: C
Explanation: An “as is” clause offers protection only when the seller has made full disclosures and has not engaged in fraud or misrepresentation.
Citation: Prudential Insurance Co. v. Jefferson Associates, 896 S.W.2d 156 (Tex. 1995)
Q75. What is the primary duty of a buyer’s agent under a Texas agency agreement?
Correct Answer: B
Explanation: Under agency law, the buyer’s agent owes fiduciary duties to the buyer, including loyalty, full disclosure, and reasonable care.
Citation: TREC Rule §531.1
Q76. What document notifies a buyer of any prior use of a property for hazardous waste storage?
Correct Answer: B
Explanation: The Seller’s Disclosure Notice must include known material facts, including environmental hazards like prior hazardous waste storage.
Citation: Texas Property Code §5.008
Q77. Which party usually pays for the owner’s title policy in a Texas residential transaction?
Correct Answer: A
Explanation: The seller typically pays for the owner’s title policy, though this is negotiable and can be changed in the contract.
Citation: TREC 1–4 Family Residential Contract, Paragraph 6A(1)
Q78. How long does a buyer have to terminate a contract after receiving the Seller’s Disclosure Notice?
Correct Answer: C
Explanation: Buyers have 7 days to terminate the contract after receiving the disclosure if it was not delivered before signing.
Citation: Texas Property Code §5.008(d)
Q79. A license holder tells a client, “You’ll double your money on this property in a year.” This is:
Correct Answer: C
Explanation: Promising investment returns without factual basis constitutes misrepresentation and may violate DTPA and TREC ethics rules.
Citation: TREC Rule §535.155(c)
Q80. What type of property is exempt from the Seller’s Disclosure Notice requirement?
Correct Answer: B
Explanation: Certain types of sales, such as foreclosures and new construction homes, are exempt from the statutory disclosure requirement.
Citation: Texas Property Code §5.008(e)
Q81. What must a license holder do when receiving multiple offers on a property?
Correct Answer: C
Explanation: License holders are required to present all offers received to the seller as soon as possible, regardless of offer amount or conditions.
Citation: TREC Rule §535.156(b)
Q82. Which of the following scenarios represents blockbusting?
Correct Answer: B
Explanation: Blockbusting involves persuading owners to sell based on the entry of a protected class into the neighborhood—this is illegal under fair housing laws.
Citation: 42 U.S.C. §3604(e)
Q83. A license holder is asked about crime statistics in a neighborhood. What is the best response?
Correct Answer: B
Explanation: License holders should direct clients to an objective third-party source for crime data to avoid misrepresentation or steering claims.
Citation: TREC Rule §531.2
Q84. When may a broker pay a referral fee to an unlicensed individual?
Correct Answer: C
Explanation: Texas law prohibits paying referral fees to unlicensed individuals. Doing so constitutes paying for brokerage services without a license.
Citation: Texas Occupations Code §1101.651(a)
Q85. A sales agent leaves a broker and takes listing agreements with them. This is:
Correct Answer: B
Explanation: Listings belong to the broker, not the agent. The broker must approve in writing for any transfer of listing agreements.
Citation: TREC Rule §535.2(e)
Q86. What is the TREC rule on rebate offers to consumers?
Correct Answer: C
Explanation: Rebates are legal in Texas as long as they are disclosed in writing to all parties involved in the transaction.
Citation: TREC Rule §535.147(e)
Q87. If a buyer cancels a contract within the option period, what happens to the earnest money?
Correct Answer: C
Explanation: If a buyer terminates under the option period, the earnest money is typically refunded per the terms of the contract.
Citation: TREC 1–4 Family Contract, Paragraph 23
Q88. Which of the following must be disclosed even if not asked?
Correct Answer: C
Explanation: Known material defects must be disclosed regardless of whether the buyer asks. Failure to do so may be considered misrepresentation.
Citation: Texas Property Code §5.008
Q89. A buyer asks about schools in the area. What is the proper response?
Correct Answer: B
Explanation: Agents should avoid subjective statements and direct clients to objective, third-party sources like the Texas Education Agency website.
Citation: TREC Rule §531.2
Q90. What must be included in a broker’s transaction file?
Correct Answer: B
Explanation: Brokers are required to keep all transaction-related documents, including contracts, disclosures, and addenda, for a minimum of 3 years.
Citation: TREC Rule §535.2(g)
Q91. What is the mandatory retention period for real estate records in Texas?
Correct Answer: C
Explanation: Texas brokers must retain all records related to a transaction for a minimum of 3 years from the closing or termination date.
Citation: TREC Rule §535.2(g)
Q92. A broker uses a business name not registered with TREC. What is this considered?
Correct Answer: B
Explanation: Using an unregistered assumed name constitutes misleading advertising and violates TREC’s advertising rules.
Citation: TREC Rule §535.154
Q93. What is required for a broker to pay a commission to a sales agent?
Correct Answer: A
Explanation: A sales agent must be actively licensed and sponsored by the paying broker in order to receive a commission from that broker.
Citation: Texas Occupations Code §1101.651(d)
Q94. When must the IABS form be provided to a prospective client?
Correct Answer: C
Explanation: The Information About Brokerage Services form must be delivered at the first substantive communication about a real estate transaction.
Citation: TREC Rule §531.20
Q95. A license holder misstates square footage on a listing. This is considered:
Correct Answer: B
Explanation: Providing inaccurate square footage—especially if relied on by the buyer—may constitute negligent misrepresentation and violate DTPA.
Citation: Texas Business and Commerce Code §17.46
Q96. Which agency enforces federal fair housing laws?
Correct Answer: D
Explanation: HUD is the primary agency that administers and enforces the Fair Housing Act and investigates complaints of housing discrimination.
Citation: 42 U.S.C. §3608
Q97. A sponsoring broker is liable for the actions of:
Correct Answer: B
Explanation: A broker is responsible for the actions of agents they sponsor, especially those performed within the scope of real estate services.
Citation: TREC Rule §535.2(e)
Q98. What must be included in the advertisement of a team name?
Correct Answer: C
Explanation: Team advertising must include the sponsoring broker’s name in a size no smaller than half the largest text in the ad.
Citation: TREC Rule §535.154(c)
Q99. What is the result of practicing real estate in Texas without a license?
Correct Answer: C
Explanation: Engaging in real estate brokerage without a license is a Class A misdemeanor and may result in fines and other disciplinary actions.
Citation: Texas Occupations Code §1101.758
Q100. A sales agent makes cold calls to potential sellers without checking the DNC list. This is:
Correct Answer: B
Explanation: Making unsolicited calls to individuals on the national Do Not Call list violates federal telemarketing laws enforced by the FTC.
Citation: 16 C.F.R. Part 310 (Telemarketing Sales Rule)
Q101. What must a broker do before a license holder can use an assumed business name?
Correct Answer: C
Explanation: TREC requires a broker to notify the Commission in writing before using an assumed business name in advertising or business operations.
Citation: TREC Rule §535.154(b)(1)
Q102. Which of the following statements is true about a license holder’s fiduciary duty of disclosure?
Correct Answer: C
Explanation: License holders have a duty to disclose all known material facts to clients and customers, even if those facts negatively affect the transaction.
Citation: TREC Rule §531.2
Q103. A license holder receives a bonus from a home warranty company for each sale. What is required?
Correct Answer: A
Explanation: Any compensation from a third-party service provider, such as a warranty company, must be disclosed in writing before the transaction closes.
Citation: TREC Rule §535.148(b)
Q104. Which of the following requires a real estate license in Texas?
Correct Answer: C
Explanation: Apartment locators receiving compensation for bringing tenants to landlords must be licensed under TREC rules.
Citation: TREC Rule §535.4(k)
Q105. A license holder fails to advise a buyer to have a property inspected. What could this result in?
Correct Answer: B
Explanation: Failure to advise buyers to obtain property inspections may constitute negligence and expose the license holder to liability under the DTPA.
Citation: Texas Business and Commerce Code §17.46(b)(24)
Q106. What happens if a broker’s trust account is not properly reconciled monthly?
Correct Answer: C
Explanation: Trust accounts must be properly reconciled monthly by the broker. Failure to do so violates TREC’s rules and may result in disciplinary action.
Citation: TREC Rule §535.146(c)(6)
Q107. What is the legal status of a contract that is missing the signatures of both parties?
Correct Answer: D
Explanation: A contract that lacks the necessary signatures is unenforceable because mutual assent has not been established.
Citation: Texas Contract Law – Statute of Frauds
Q108. Under Texas law, who may file a claim against the Real Estate Recovery Trust Account?
Correct Answer: B
Explanation: Only consumers who have obtained a court judgment for damages caused by a license holder’s fraud or misrepresentation can apply to the Recovery Trust Account.
Citation: Texas Occupations Code §1101.604
Q109. A license holder provides a CMA with intentional exaggeration. What is the result?
Correct Answer: B
Explanation: Providing knowingly false or misleading estimates in a CMA can result in a DTPA claim and TREC disciplinary action for deception.
Citation: Texas Business and Commerce Code §17.46(b)(2)
Q110. Which document defines the broker’s obligation to represent the buyer’s best interests?
Correct Answer: C
Explanation: The Buyer Representation Agreement establishes the agency relationship between the broker and buyer and sets fiduciary obligations.
Citation: TREC Rule §535.2(a)
Q111. What is the minimum age requirement to obtain a real estate license in Texas?
Correct Answer: B
Explanation: To be eligible for a real estate license in Texas, an applicant must be at least 18 years old.
Citation: Texas Occupations Code §1101.354(a)(1)
Q112. Which of the following acts by a license holder would be considered unauthorized practice of law?
Correct Answer: C
Explanation: License holders may complete TREC-promulgated forms but cannot alter their wording, as that constitutes unauthorized practice of law.
Citation: TREC Rule §537.11(a)
Q113. Which agency investigates ethics violations in real estate advertising?
Correct Answer: C
Explanation: TREC enforces advertising rules for license holders and investigates complaints related to unethical or deceptive practices.
Citation: Texas Occupations Code §1101.204
Q114. What must a license applicant do before scheduling their licensing exam?
Correct Answer: B
Explanation: Before scheduling the licensing exam, applicants must complete required coursework and receive an eligibility letter from TREC.
Citation: TREC Application Process Overview
Q115. Which of the following is a legally required disclosure for residential transactions?
Correct Answer: C
Explanation: Texas law requires sellers to disclose any known material defects that could affect a buyer’s decision to purchase the property.
Citation: Texas Property Code §5.008
Q116. What is the consequence for a broker who fails to maintain written policies for supervision?
Correct Answer: B
Explanation: Brokers are required to implement written policies and procedures to ensure compliance by their sponsored agents. Failure may result in disciplinary action.
Citation: TREC Rule §535.2(i)
Q117. What is required to establish an intermediary relationship in Texas?
Correct Answer: B
Explanation: Intermediary relationships require written consent from both parties to a transaction and must be clearly documented.
Citation: Texas Occupations Code §1101.559
Q118. A license holder wants to open a separate account for trust funds. What is required?
Correct Answer: C
Explanation: Trust accounts must be supervised by the broker and maintained with accurate records to prevent commingling or mismanagement.
Citation: TREC Rule §535.146
Q119. Which of the following is considered commingling?
Correct Answer: C
Explanation: Commingling occurs when a license holder mixes client funds with personal or business funds, which is a serious violation.
Citation: TREC Rule §535.146(b)(2)
Q120. When is a license holder required to renew their license in Texas?
Correct Answer: B
Explanation: Real estate licenses in Texas expire two years after issuance. License holders must complete renewal steps and CE before expiration.
Citation: Texas Occupations Code §1101.451
Q121. What is the consequence if a license holder fails to complete mandatory continuing education (CE) before renewal?
Correct Answer: C
Explanation: If CE requirements are not met before the expiration date, the license becomes inactive and must be reactivated with proof of CE and a late fee.
Citation: TREC Rule §535.92(f)
Q122. What is required for a license holder to legally refer a client to a third-party vendor?
Correct Answer: C
Explanation: Referring clients to service providers in which the license holder has a financial interest requires written disclosure under RESPA and TREC rules.
Citation: 12 U.S.C. §2607 and TREC Rule §531.20
Q123. Which activity is permitted for an unlicensed assistant in Texas?
Correct Answer: C
Explanation: Unlicensed assistants may deliver paperwork or perform administrative tasks but may not negotiate or explain legal documents.
Citation: TREC Rule §535.4(g)
Q124. When must a license holder provide the Consumer Protection Notice?
Correct Answer: D
Explanation: The TREC Consumer Protection Notice (Form CN 1-3) must be posted in a visible location at the licensee’s office and on their business website homepage.
Citation: TREC Rule §531.18
Q125. A license holder makes a misrepresentation that causes financial harm. What is the most likely result?
Correct Answer: B
Explanation: A consumer harmed by a misrepresentation may sue under the Texas Deceptive Trade Practices Act (DTPA) and seek damages.
Citation: Texas Business and Commerce Code §17.41 et seq.
Q126. A sponsoring broker delegates training to a team leader. What must the broker still ensure?
Correct Answer: C
Explanation: Even when training is delegated, the broker remains responsible and must verify that education and supervision are adequate and documented.
Citation: TREC Rule §535.2(e)
Q127. Which statement is TRUE about net listings in Texas?
Correct Answer: B
Explanation: Net listings are legal in Texas only if the seller is clearly informed of the market value and agrees to the arrangement in writing.
Citation: TREC Rule §535.16
Q128. What is the purpose of the Legal Update I and II courses?
Correct Answer: B
Explanation: Legal Update I and II are mandatory CE courses focused on new laws, rules, and best practices in real estate to keep license holders informed.
Citation: TREC Rule §535.92(a)(1)
Q129. What happens if a license holder is convicted of a felony?
Correct Answer: C
Explanation: License holders must report any felony convictions to TREC within 30 days, and TREC may initiate disciplinary action based on the offense.
Citation: TREC Rule §541.1(b)
Q130. Which of the following would violate the Canons of Professional Ethics?
Correct Answer: C
Explanation: Discrimination on the basis of national origin violates both federal law and the Canons of Professional Ethics in Texas real estate practice.
Citation: TREC Rule §531.19
Q131. What must a license holder do when receiving a referral fee from an out-of-state broker?
Correct Answer: B
Explanation: Texas license holders may pay or receive referral fees from out-of-state brokers, as long as the non-Texas broker does not perform real estate services in Texas.
Citation: TREC Rule §535.131(a)
Q132. Which of the following would constitute a violation of the Sherman Antitrust Act in real estate?
Correct Answer: B
Explanation: Market allocation agreements between competitors, such as dividing territories, violate federal antitrust laws.
Citation: 15 U.S.C. §§ 1–7 (Sherman Act)
Q133. Which disclosure must be provided at the first substantive dialogue about a transaction?
Correct Answer: C
Explanation: The IABS form must be provided to all potential parties to a transaction during the first substantive communication regarding a specific property or real estate service.
Citation: TREC Rule §531.20(b)
Q134. A buyer is concerned about flooding in the area. What should the agent do?
Correct Answer: C
Explanation: Agents must avoid giving potentially misleading information and should refer buyers to official sources for flood zone and insurance details.
Citation: TREC Rule §535.156(b)
Q135. What type of listing agreement is least desirable for a broker?
Correct Answer: D
Explanation: In an open listing, the broker is only paid if they personally produce the buyer, which offers the least protection or incentive.
Citation: TREC Guidelines on Listing Types
Q136. Which action by a broker could be grounds for license revocation?
Correct Answer: C
Explanation: Commissions may only be paid to licensed individuals or entities; paying an unlicensed person for brokerage activity is a serious violation.
Citation: Texas Occupations Code §1101.651(a)(2)
Q137. A Texas sales agent negotiates directly with a seller about the listing price. What is the issue?
Correct Answer: C
Explanation: All negotiations must occur under the supervision of or with the authority of the sponsoring broker. Agents may not operate independently.
Citation: TREC Rule §535.2(k)
Q138. Which document is used to modify terms of an executed contract?
Correct Answer: A
Explanation: Once a contract is fully executed, changes to the terms must be documented using an amendment signed by all parties.
Citation: TREC Contract Amendments Guide
Q139. How long must brokers retain transaction records?
Correct Answer: C
Explanation: Brokers must retain transaction files, contracts, and correspondence for at least three years from the date of closing or termination.
Citation: TREC Rule §535.2(h)
Q140. Which law prohibits discrimination based on familial status?
Correct Answer: C
Explanation: The federal Fair Housing Act prohibits discrimination in housing based on familial status, including the presence of children under 18.
Citation: 42 U.S.C. §3604
Q141. What must a license holder do if sued for a real estate-related matter?
Correct Answer: B
Explanation: TREC requires license holders to report any real estate-related lawsuit against them within 30 days of notice.
Citation: TREC Rule §535.91(a)(3)
Q142. What does TREC require regarding team names in advertising?
Correct Answer: A
Explanation: TREC requires team names to include “team” or “group” and prohibits misleading terms like “realty” or “broker.”
Citation: TREC Rule §535.154(c)(2)(D)
Q143. When is a license holder required to provide the IABS form in writing?
Correct Answer: C
Explanation: TREC mandates that the Information About Brokerage Services form be delivered at the first substantive discussion of services.
Citation: TREC Rule §531.20
Q144. A license holder receives a referral fee from a title company. This is:
Correct Answer: B
Explanation: The Real Estate Settlement Procedures Act (RESPA) prohibits unearned fees or kickbacks from title companies to license holders.
Citation: 12 U.S.C. §2607(a)
Q145. Which of the following requires a license in Texas?
Correct Answer: C
Explanation: Performing real estate services for another person in exchange for compensation requires a license under Texas law.
Citation: Texas Occupations Code §1101.002(1)
Q146. If a license holder receives a complaint from TREC, they must:
Correct Answer: B
Explanation: TREC rules require a timely written response to any complaint notification. Failure to respond may lead to disciplinary action.
Citation: TREC Rule §535.141(c)
Q147. What is the legal consequence of offering rebates without disclosure?
Correct Answer: B
Explanation: Rebates must be disclosed in writing to all parties in a transaction. Failure to do so may result in disciplinary action.
Citation: TREC Rule §535.147(e)
Q148. A broker fails to supervise sponsored agents properly. What is the result?
Correct Answer: B
Explanation: Brokers are legally responsible for ensuring their sponsored agents follow the law. Lack of supervision can lead to sanctions.
Citation: TREC Rule §535.2
Q149. What is an “option fee” in a Texas real estate contract?
Correct Answer: B
Explanation: The option fee secures the buyer’s right to terminate the contract during the option period for any reason.
Citation: TREC 1–4 Family Residential Contract Paragraph 23
Q150. A broker receives earnest money but does not deposit it. This is an example of:
Correct Answer: B
Explanation: Conversion occurs when funds intended to be held in trust are not properly deposited or are misused.
Citation: TREC Rule §535.146(b)(1)
Q151. Which of the following activities requires a Texas real estate license?
Correct Answer: C
Explanation: Any activity involving negotiation or representation for a fee requires a license in Texas.
Citation: Texas Occupations Code §1101.002(1)
Q152. What is the primary function of the Texas Real Estate Commission (TREC)?
Correct Answer: C
Explanation: TREC’s mission is to protect consumers by licensing and regulating real estate professionals in Texas.
Citation: Texas Occupations Code §1101.051
Q153. What is the penalty for violating TREC advertising rules?
Correct Answer: C
Explanation: Violations of advertising rules can result in significant administrative penalties up to $5,000 per day, per offense.
Citation: Texas Occupations Code §1101.701
Q154. What does the term “conversion” mean in real estate practice?
Correct Answer: C
Explanation: Conversion is the unauthorized use of client funds, which is a serious violation of TREC rules.
Citation: TREC Rule §535.146(b)(1)
Q155. What must an intermediary broker do to make appointments?
Correct Answer: B
Explanation: Appointments in an intermediary transaction require written consent from both buyer and seller to comply with TREC rules.
Citation: Texas Occupations Code §1101.559
Q156. A license holder fails to renew their license on time. What happens?
Correct Answer: B
Explanation: If a license is not renewed by the expiration date, it expires, and reinstatement requires fees and proof of CE completion.
Citation: TREC Rule §535.93
Q157. Who may maintain an escrow or trust account?
Correct Answer: B
Explanation: Only licensed brokers or their designated associates may maintain trust or escrow accounts on behalf of clients.
Citation: TREC Rule §535.146
Q158. What must be done if a license holder receives a referral fee from a title company?
Correct Answer: C
Explanation: Accepting referral fees is illegal unless they are properly disclosed. RESPA and TREC rules prohibit undisclosed compensation.
Citation: 12 U.S.C. §2607 (RESPA); TREC Rule §535.148(b)
Q159. What is the statute of limitations for filing a complaint with TREC?
Correct Answer: D
Explanation: TREC allows complaints to be filed within four years from the date of the incident or discovery of the alleged violation.
Citation: TREC Rule §533.2
Q160. Which party typically pays for the survey in a Texas real estate transaction?
Correct Answer: C
Explanation: The party responsible for survey costs is determined by agreement between the buyer and seller in the purchase contract.
Citation: TREC 1–4 Family Contract, Paragraph 6C(1)
Q161. What is the legal effect of a counteroffer in Texas real estate transactions?
Correct Answer: C
Explanation: A counteroffer acts as a rejection of the original offer and initiates a new offer with different terms, shifting the power of acceptance to the other party.
Citation: Texas Contract Law Overview
Q162. What is the primary purpose of errors and omissions (E&O) insurance for real estate professionals?
Correct Answer: C
Explanation: E&O insurance protects agents and brokers from liability arising from professional errors or unintentional omissions during transactions.
Citation: TREC Brokerage and Risk Management Resources
Q163. Which form is promulgated by TREC for use in residential resale transactions?
Correct Answer: A
Explanation: TREC promulgates the One to Four Family Residential Contract (Resale) for use in most existing single-family property transactions in Texas.
Citation: TREC Contract Forms Library
Q164. If a listing agent knows that the roof leaks but the seller does not disclose it, what must the agent do?
Correct Answer: C
Explanation: Texas law requires license holders to disclose known material defects, even if the seller has not disclosed them.
Citation: TREC Rule §535.156(b)
Q165. What is the role of a sponsoring broker in relation to their sales agents?
Correct Answer: C
Explanation: The sponsoring broker is legally accountable for the conduct of sales agents under their license, including supervision and compliance.
Citation: TREC Rule §535.2(e)
Q166. When must the IABS form be provided to a consumer?
Correct Answer: C
Explanation: TREC requires the Information About Brokerage Services form be presented at the first substantive dialogue with a consumer about a specific property.
Citation: TREC Rule §531.20(b)
Q167. What does the term “fiduciary duty” mean in real estate?
Correct Answer: B
Explanation: Fiduciary duties include loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care toward the client.
Citation: Texas Real Estate Agency Law
Q168. Which Texas law requires a license for managing or leasing real estate for others for compensation?
Correct Answer: C
Explanation: TRELA defines real estate brokerage activities and mandates licensure for anyone managing, leasing, or negotiating real estate deals for compensation.
Citation: Texas Occupations Code §1101.002(1)(A)
Q169. If a broker deposits a client’s escrow funds into a business operating account, what violation has occurred?
Correct Answer: B
Explanation: Mixing client funds with the broker’s own business funds is known as commingling and is a violation of TREC rules.
Citation: TREC Rule §535.146(b)(2)
Q170. What must be included in all advertising by a real estate license holder?
Correct Answer: C
Explanation: TREC advertising rules require that a license holder include both their name and the name of their sponsoring broker or brokerage in all advertising.
Citation: TREC Rule §535.155(b)(1)
Q171. What must be included in all advertising by a Texas real estate license holder?
Correct Answer: C
Explanation: All advertising must clearly and conspicuously include the name of the sponsoring broker, per TREC rules.
Citation: TREC Rule §535.155(b)(1)
Q172. What happens if a license holder fails to disclose a familial relationship in a transaction?
Correct Answer: B
Explanation: TREC may take disciplinary action for failure to disclose a familial or financial interest, which is a violation of fiduciary duty.
Citation: TREC Rule §535.144(a)
Q173. A license holder tells a buyer that a property “will double in value in two years.” This is considered:
Correct Answer: C
Explanation: Guarantees of future appreciation without basis are misrepresentations under the Deceptive Trade Practices Act (DTPA).
Citation: Texas Business and Commerce Code §17.46(b)(5)
Q174. A broker’s assumed business name must be:
Correct Answer: A
Explanation: All assumed business names must be registered with TREC before being used in advertising or on signage.
Citation: TREC Rule §535.154(c)(2)
Q175. What is the effect of an option clause in a Texas residential contract?
Correct Answer: B
Explanation: An option clause gives the buyer an unrestricted right to terminate the contract during the negotiated option period.
Citation: TREC 1–4 Family Residential Contract, Paragraph 23
Q176. Which of the following is required in intermediary relationships?
Correct Answer: B
Explanation: Intermediary relationships require written consent from both parties for the broker to act neutrally in the transaction.
Citation: Texas Occupations Code §1101.559(b)
Q177. What is the TREC rule regarding earnest money deposit timelines?
Correct Answer: C
Explanation: Earnest money must be delivered to the escrow agent by the end of the third business day after the effective date of the contract.
Citation: TREC 1–4 Family Residential Contract, Paragraph 5
Q178. A broker appoints agents to represent the buyer and seller. This is:
Correct Answer: B
Explanation: Texas law allows intermediary with appointments, where the broker designates license holders to represent each party in the transaction.
Citation: Texas Occupations Code §1101.560
Q179. What agency investigates complaints against real estate license holders in Texas?
Correct Answer: A
Explanation: TREC is the state agency authorized to investigate and take disciplinary action on violations of license law and rules.
Citation: Texas Occupations Code §1101.204
Q180. What is the legal effect of an “as is” clause in a Texas residential contract?
Correct Answer: B
Explanation: An “as is” clause is enforceable only if the seller has not committed fraud, misrepresentation, or failed to disclose material defects.
Citation: Prudential Insurance Co. v. Jefferson Associates, 896 S.W.2d 156 (Tex. 1995)
Q181. A license holder tells a homeowner that “property values will fall due to the influx of minority families.” This is:
Correct Answer: A
Explanation: Making statements intended to induce panic selling based on the presence of protected classes is known as blockbusting, which is illegal under the Fair Housing Act.
Citation: 42 U.S.C. §3604(e)
Q182. If a license holder fails to advise a client to obtain an attorney when appropriate, this may be considered:
Correct Answer: D
Explanation: Failing to suggest legal counsel when appropriate may breach a license holder’s fiduciary duty to act in the best interest of the client.
Citation: TREC Rule §531.2
Q183. A Texas license holder must respond to TREC inquiries within:
Correct Answer: B
Explanation: License holders are required to respond to any request from the Commission within 10 days or may be subject to disciplinary action.
Citation: TREC Rule §535.91(a)(3)
Q184. A broker appoints two license holders to represent buyer and seller in the same transaction. This is:
Correct Answer: B
Explanation: A broker may act as an intermediary and appoint associated license holders to represent each party with written consent from both parties.
Citation: Texas Occupations Code §1101.560
Q185. Which of the following actions is most likely to be considered a deceptive trade practice?
Correct Answer: C
Explanation: Withholding known material facts is a deceptive act under the Texas Deceptive Trade Practices Act (DTPA).
Citation: Texas Business and Commerce Code §17.46
Q186. Who is legally responsible for ensuring advertising complies with TREC rules?
Correct Answer: C
Explanation: The sponsoring broker is ultimately responsible for all advertising content distributed by sponsored license holders.
Citation: TREC Rule §535.2(i)(1)(B)
Q187. What must be true for a license holder to collect a commission on a real estate transaction?
Correct Answer: B
Explanation: In Texas, the statute of frauds requires that any agreement to pay commission be in writing and signed by the party to be charged.
Citation: Texas Occupations Code §1101.806
Q188. When must the Information About Brokerage Services (IABS) form be delivered?
Correct Answer: C
Explanation: Texas law requires the IABS form be delivered at the first substantive conversation regarding a potential real estate transaction.
Citation: TREC Rule §531.20
Q189. What is the primary purpose of the Texas Real Estate Recovery Trust Account?
Correct Answer: C
Explanation: The Recovery Trust Account compensates consumers who suffer monetary damages due to a license holder’s unlawful conduct when other recovery efforts fail.
Citation: Texas Occupations Code §1101.603
Q190. An agent claims a property is “the best value in the city” without substantiation. This is considered:
Correct Answer: B
Explanation: Statements that are clearly subjective opinions, like “best value,” are considered puffery and not actionable misrepresentation under law.
Citation: Common Law; DTPA Precedents
Q191. What must be included in a property management agreement in Texas?
Correct Answer: B
Explanation: Property management agreements must be in writing and include clear terms such as termination conditions and compensation.
Citation: TREC Rule §535.2(i)(6)
Q192. A license holder is sued for negligence. What should they do immediately?
Correct Answer: B
Explanation: License holders should promptly notify their sponsoring broker and errors and omissions (E&O) insurance provider when sued for professional negligence.
Citation: Texas Real Estate Commission Best Practices
Q193. What must a license holder do before negotiating a second offer on a property already under contract?
Correct Answer: C
Explanation: The license holder must disclose that the property is already under contract and may only proceed with a backup offer if agreed upon.
Citation: TREC Rule §535.156(b)
Q194. What is the purpose of the Texas Real Estate Recovery Trust Account?
Correct Answer: C
Explanation: The fund provides financial restitution to consumers who win court judgments against license holders for fraud or misrepresentation.
Citation: Texas Occupations Code §1101.603
Q195. What is an “option fee” in a Texas real estate contract?
Correct Answer: B
Explanation: The option fee is paid by the buyer to the seller for the unrestricted right to terminate the contract during a specific period.
Citation: TREC 1–4 Family Residential Contract, Paragraph 5B
Q196. A license holder emails listing details to a buyer without the seller’s consent. What is this?
Correct Answer: B
Explanation: License holders owe fiduciary duties to their client and may not disclose confidential information or listings without permission.
Citation: TREC Rule §531.1(4)
Q197. Which of the following acts may result in suspension or revocation of a license?
Correct Answer: B
Explanation: Advertising that omits the broker’s name or uses misleading content is a violation of advertising rules and grounds for discipline.
Citation: TREC Rule §535.154
Q198. A license holder is found guilty of fraud in a civil lawsuit. What can TREC do?
Correct Answer: B
Explanation: TREC has authority to discipline license holders for fraud or unethical conduct proven in civil court.
Citation: Texas Occupations Code §1101.656
Q199. How long must a broker retain files on completed real estate transactions?
Correct Answer: C
Explanation: TREC requires brokers to retain records of transactions for at least four years from closing or termination.
Citation: TREC Rule §535.2(i)(2)
Q200. A Texas license holder has a business website. Which statement correctly describes what the website must display regarding the Information About Brokerage Services (IABS) notice?
Correct Answer: B
Explanation: Texas rules require each license holder to provide a homepage link to the IABS form in a readily noticeable place, using the prescribed labeling and minimum font sizing. The IABS notice is also tied to statutory representation disclosure requirements.
Citation: 22 TAC §531.20(b); Texas Occupations Code §1101.558
Q201. What is required to establish an intermediary relationship in Texas?
Correct Answer: C
Explanation: Intermediary relationships require the broker to obtain written consent from both parties, with clear notice of the intermediary status.
Citation: Texas Occupations Code §1101.559
Q202. What is the purpose of the Texas Real Estate Commission (TREC)?
Correct Answer: C
Explanation: TREC’s mission is to protect consumers of real estate services by ensuring qualified and ethical real estate professionals operate in the state.
Citation: TREC Mission Statement
Q203. Which of the following activities requires a real estate license in Texas?
Correct Answer: C
Explanation: Receiving or expecting compensation for helping someone buy, sell, or lease real estate requires a license under Texas law.
Citation: Texas Occupations Code §1101.002(1)
Q204. What happens if a broker fails to properly supervise sponsored agents?
Correct Answer: C
Explanation: Brokers are responsible for the actions of their sponsored agents and must supervise them according to TREC rules or face penalties.
Citation: TREC Rule §535.2(g)
Q205. When must the IABS form be delivered to a prospective client?
Correct Answer: B
Explanation: The Information About Brokerage Services form must be delivered at the first substantive discussion of a real estate transaction.
Citation: TREC Rule §531.20
Q206. How should a license holder respond if they are asked to misrepresent a material fact?
Correct Answer: C
Explanation: Misrepresenting facts is a violation of both DTPA and TREC rules. License holders must maintain honesty and integrity at all times.
Citation: TREC Rule §531.2
Q207. What is the penalty per violation per day for violating the Texas Real Estate License Act?
Correct Answer: C
Explanation: TREC may impose an administrative penalty of up to $5,000 per violation per day under the License Act.
Citation: Texas Occupations Code §1101.701(b)
Q208. Which of the following is NOT a protected class under the federal Fair Housing Act?
Correct Answer: C
Explanation: Age is not covered under the Fair Housing Act, though it may be protected under other laws such as the Equal Credit Opportunity Act.
Citation: 42 U.S.C. §3604
Q209. What must a license holder do if convicted of a felony?
Correct Answer: B
Explanation: License holders must notify TREC in writing within 30 days of any felony conviction or plea, per Texas rules.
Citation: TREC Rule §535.91(a)(2)
Q210. Which Texas law prohibits misrepresentation and fraud in business practices?
Correct Answer: C
Explanation: The Texas Deceptive Trade Practices Act (DTPA) protects consumers from false, misleading, or deceptive business practices.
Citation: Texas Business and Commerce Code §17.41 et seq.
Q211. A seller’s disclosure notice in Texas is required for which of the following property types?
Correct Answer: C
Explanation: Texas law requires sellers of single-family residential property to provide a Seller’s Disclosure Notice unless exempted. Sales between spouses or new constructions may be exempt.
Citation: Texas Property Code §5.008
Q212. Which of the following may TREC NOT do when disciplining a license holder?
Correct Answer: B
Explanation: TREC may impose penalties, suspend or revoke licenses, and issue reprimands—but cannot force a license holder to pay restitution. That must be pursued through civil court.
Citation: Texas Occupations Code §1101.702
Q213. A broker has multiple offers on a listing. What must they do?
Correct Answer: B
Explanation: Brokers are legally and ethically obligated to present all offers to their client promptly unless directed otherwise by the client in writing.
Citation: TREC Rule §535.156
Q214. Which Texas law requires that real estate advertisements avoid misleading content?
Correct Answer: A
Explanation: The Texas DTPA prohibits false, misleading, or deceptive practices in business—including real estate advertising.
Citation: Texas Business & Commerce Code §17.41 et seq.
Q215. What is the primary role of the Texas Real Estate Commission (TREC)?
Correct Answer: C
Explanation: TREC is responsible for licensing real estate professionals and enforcing regulations to ensure compliance and protect the public.
Citation: Texas Occupations Code §1101.051
Q216. A real estate team name must include which of the following under TREC rules?
Correct Answer: C
Explanation: TREC rules require that any team name includes the word “team” or “group” and must not imply the entity is a brokerage on its own.
Citation: TREC Rule §535.154(c)(3)
Q217. A sponsoring broker must maintain written policies that cover:
Correct Answer: C
Explanation: Brokers must provide written policies that cover agency responsibilities, advertising standards, and proper recordkeeping procedures.
Citation: TREC Rule §535.2(i)
Q218. Which party typically orders the title insurance policy in Texas?
Correct Answer: C
Explanation: In Texas, the title company or escrow officer typically initiates the title policy process once the contract is executed.
Citation: Texas Title Insurance Basic Manual – Procedural Rule P-1
Q219. Which of the following is required to lawfully terminate a listing agreement early in Texas?
Correct Answer: A
Explanation: While a listing agreement may include cancellation terms, it generally requires written mutual consent to terminate early unless specific clauses provide unilateral termination rights.
Citation: Texas Real Estate Agency Guidelines
Q220. If a buyer terminates the contract during the option period, what is the status of the earnest money?
Correct Answer: B
Explanation: If the buyer terminates within the option period under Paragraph 23 of the contract, they are entitled to a refund of the earnest money (though the option fee is non-refundable).
Citation: TREC One to Four Family Residential Contract – Paragraph 23
Q221. What must a license holder do before placing a sign on a property?
Correct Answer: B
Explanation: Texas license holders must obtain written consent from the property owner before placing any signage.
Citation: TREC Rule §535.155(d)(7)
Q222. Under what condition may a broker release escrow funds without mutual agreement of the parties?
Correct Answer: C
Explanation: Escrow funds can only be released without agreement if directed by a court or if the broker interpleads the funds into court.
Citation: TREC Rule §535.146(g)
Q223. A license holder is convicted of a felony. What is the immediate consequence?
Correct Answer: A
Explanation: A felony conviction triggers automatic revocation or suspension of a real estate license in Texas.
Citation: Texas Occupations Code §53.021
Q224. What version of the Consumer Protection Notice must be displayed as of 2026?
Correct Answer: C
Explanation: As of September 1, 2023, TREC requires license holders to use and display Form CN 1-5.
Citation: TREC Website — Forms Update (Sept. 2023)
Q225. What is the penalty for practicing real estate without a license in Texas?
Correct Answer: C
Explanation: Acting as a broker or agent without a license is a Class A misdemeanor and may also incur administrative fines from TREC.
Citation: Texas Occupations Code §1101.758
Q226. If a broker allows an unlicensed person to perform brokerage activities, the broker:
Correct Answer: C
Explanation: Brokers are responsible for preventing unlicensed individuals from engaging in real estate brokerage and can face disciplinary action if they enable it.
Citation: TREC Rule §535.2(e)
Q227. A broker receives trust funds and places them in a personal account temporarily. What is this called?
Correct Answer: C
Explanation: Commingling occurs when a broker mixes client funds with personal or business funds, a violation of fiduciary duty.
Citation: TREC Rule §535.146(b)(2)
Q228. What is the term for encouraging a property owner to sell based on changes in neighborhood demographics?
Correct Answer: C
Explanation: Blockbusting is the illegal practice of inducing owners to sell based on the perceived entry of protected groups into a neighborhood.
Citation: 42 U.S.C. §3604(e)
Q229. What is required for a broker to maintain a trust account?
Correct Answer: B
Explanation: A broker maintaining a trust account must follow detailed rules, including notifying clients, proper segregation of funds, and account reconciliation.
Citation: TREC Rule §535.146
Q230. Which of the following must a broker maintain as part of supervisory duties?
Correct Answer: B
Explanation: TREC requires brokers to provide a written policies and procedures manual to guide and supervise agents.
Citation: TREC Rule §535.2(i)(3)
Q231. A license holder changes their name. What must they do?
Correct Answer: C
Explanation: Name changes must be reported to TREC by submitting the appropriate form and documentation (such as a marriage certificate).
Citation: TREC Rule §535.91(a)(1)
Q232. What is the effect of failing to deliver the IABS form when required?
Correct Answer: B
Explanation: License holders must provide the IABS form at the first substantive communication. Failing to do so violates disclosure requirements.
Citation: TREC Rule §531.20
Q233. If a broker terminates sponsorship of a sales agent, what happens?
Correct Answer: C
Explanation: When a broker terminates sponsorship, the license of the sales agent becomes inactive until a new sponsoring broker is designated.
Citation: TREC Rule §535.121(b)
Q234. A license holder refers a client to a title company in exchange for a gift card. Is this allowed?
Correct Answer: C
Explanation: The Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks or anything of value in exchange for referrals of settlement services.
Citation: 12 U.S.C. §2607(a)
Q235. What must a broker do when ceasing operations?
Correct Answer: C
Explanation: A broker who discontinues business must inform TREC and return their license certificate to the Commission immediately.
Citation: TREC Rule §535.91(a)(4)
Q236. What must be included on a license holder’s website?
Correct Answer: C
Explanation: License holders must include links to the Consumer Protection Notice and the IABS form in a readily noticeable location on their website.
Citation: TREC Rule §531.18
Q237. When acting as an intermediary, what is the broker prohibited from doing?
Correct Answer: C
Explanation: Intermediaries must not disclose confidential information about either party unless given written consent.
Citation: Texas Occupations Code §1101.559(d)
Q238. A license holder fails to supervise an unlicensed assistant. Who is liable?
Correct Answer: C
Explanation: License holders and their brokers are responsible for ensuring that unlicensed assistants do not perform activities requiring a license.
Citation: TREC Rule §535.2(g)
Q239. What is the primary duty of a license holder under TREC’s Canons of Professional Ethics?
Correct Answer: A
Explanation: The Canons of Professional Ethics state that a real estate agent’s primary duty is to protect and promote the interests of the public.
Citation: TREC Rule §531.1
Q240. A buyer’s agent receives compensation from both buyer and seller. What must happen?
Correct Answer: D
Explanation: Texas law requires written consent from all parties when a license holder is compensated by more than one party in a transaction.
Citation: Texas Occupations Code §1101.651(d)
Q241. What is the consequence if a license holder fails to complete continuing education (CE) before renewal?
Correct Answer: C
Explanation: If CE requirements are not met before renewal, the license expires and can only be reinstated after CE completion and a fee.
Citation: TREC Rule §535.92(f)
Q242. Which of the following statements about earnest money is TRUE in Texas?
Correct Answer: C
Explanation: Earnest money must be delivered to the escrow agent by the close of business on the third business day after contract execution.
Citation: TREC 1–4 Family Contract, Paragraph 5
Q243. What is required when using the term “REALTOR®” in advertising?
Correct Answer: A
Explanation: Only license holders who are members of the National Association of REALTORS® (and their local board) may use the REALTOR® designation in advertising.
Citation: NAR Trademark Rules; TREC Rule §535.154(a)
Q244. Who is responsible for ensuring a sales agent complies with advertising rules?
Correct Answer: C
Explanation: Sponsoring brokers are ultimately responsible for supervising advertising activities of their sponsored agents.
Citation: TREC Rule §535.2(e)
Q245. What is required when a license holder receives an offer on a listing?
Correct Answer: B
Explanation: License holders must promptly present all offers received to their client, regardless of price or conditions.
Citation: TREC Rule §535.156(b)
Q246. How is a net listing defined in Texas real estate?
Correct Answer: B
Explanation: In a net listing, the broker’s commission is the difference between the sale price and a minimum price set by the seller. It’s legal but discouraged.
Citation: TREC Rule §535.16(d)
Q247. Which activity by a license holder constitutes an antitrust violation?
Correct Answer: B
Explanation: Discussing commission rates with competitors may constitute price-fixing and violate the Sherman Antitrust Act.
Citation: 15 U.S.C. §1
Q248. A buyer backs out of a contract during the option period. What must the seller do to retain the option fee?
Correct Answer: C
Explanation: If the buyer terminates properly within the option period, they forfeit the option fee, which the seller retains by default regardless of earnest money disposition.
Citation: TREC One to Four Family Residential Contract, Paragraph 23
Q249. Which type of listing agreement is considered potentially unethical unless safeguards are used?
Correct Answer: A
Explanation: Net listings are legal in Texas but discouraged due to potential conflicts of interest and must only be used when the seller is fully informed.
Citation: TREC Rule §535.16(d)
Q250. When may a license holder use the term “REALTOR®” in advertising?
Correct Answer: C
Explanation: “REALTOR®” is a trademark of the National Association of REALTORS® and may only be used by active NAR members in good standing.
Citation: TREC Rule §535.154(b)
Q251. What is the penalty for engaging in real estate brokerage without a license in Texas?
Correct Answer: C
Explanation: Conducting real estate business without a license in Texas is a Class A misdemeanor and may also incur administrative penalties.
Citation: Texas Occupations Code §1101.758
Q252. What is the maximum amount a consumer may recover per judgment from the Real Estate Recovery Trust Account?
Correct Answer: B
Explanation: The maximum payment to a single judgment creditor from the Recovery Trust Account is $50,000 per transaction.
Citation: Texas Occupations Code §1101.610
Q253. Which of the following is an example of illegal commingling?
Correct Answer: B
Explanation: Commingling occurs when a license holder deposits client funds into a personal or business account rather than a trust or escrow account.
Citation: TREC Rule §535.146(b)(2)
Q254. What action must a license holder take when a client asks about local crime rates?
Correct Answer: C
Explanation: To avoid potential claims of steering or misrepresentation, license holders should refer clients to objective, third-party sources.
Citation: TREC Rule §531.2
Q255. A buyer terminates a contract during the option period. What happens to the option fee?
Correct Answer: B
Explanation: The option fee is paid to the seller for the right to terminate and is non-refundable regardless of whether the contract closes.
Citation: TREC 1–4 Family Residential Contract, Paragraph 23
Q256. How many hours of CE are required for license renewal in Texas?
Correct Answer: D
Explanation: Texas requires 18 hours of Continuing Education, including 8 hours of Legal Updates and 3 hours of contract-related coursework.
Citation: TREC Rule §535.92(a)
Q257. How long must a broker maintain transaction records?
Correct Answer: C
Explanation: Brokers must retain records of real estate transactions for at least 3 years from the date of closing or termination.
Citation: TREC Rule §535.2(g)
Q258. A license holder fails to respond to a TREC complaint notice. What is the consequence?
Correct Answer: B
Explanation: Failing to timely respond to TREC can result in disciplinary action, including suspension or revocation of a real estate license.
Citation: TREC Rule §533.2(e)
Q259. What must a license holder do before offering a guaranteed buyout to a seller?
Correct Answer: C
Explanation: Guaranteeing to buy a property requires full written disclosure to the seller and evidence that the license holder can financially perform the promise.
Citation: TREC Rule §535.155(d)(1)
Q260. Which of the following may result in license revocation even if the conduct occurred outside of a real estate transaction?
Correct Answer: B
Explanation: TREC may take disciplinary action for criminal conduct that demonstrates dishonesty or a lack of trustworthiness, even if unrelated to real estate deals.
Citation: Texas Occupations Code §1101.652(a)(2)
Q261. Which of the following would be considered commingling?
Correct Answer: A
Explanation: Commingling occurs when a license holder mixes client funds with personal or business funds, which is prohibited.
Citation: TREC Rule §535.146(b)(2)
Q262. What action by a license holder is most likely to be considered conversion?
Correct Answer: B
Explanation: Conversion involves the unauthorized use of another party’s funds, such as using escrow money for personal purposes.
Citation: TREC Rule §535.146(b)(1)
Q263. What happens if a broker fails to properly supervise sponsored agents?
Correct Answer: B
Explanation: Brokers are responsible for the supervision of their sponsored agents and may face disciplinary action for their agents’ misconduct.
Citation: TREC Rule §535.2(g)
Q264. What is required for a license holder to receive compensation from a transaction?
Correct Answer: B
Explanation: License holders may only receive compensation with the knowledge and approval of their sponsoring broker and through a written agreement.
Citation: Texas Occupations Code §1101.651(d)
Q265. Which of the following forms is required for all license holders to use when representing clients in residential sales?
Correct Answer: B
Explanation: TREC-promulgated forms like the 1–4 Family Residential Contract must be used by license holders when applicable.
Citation: TREC Rule §537.11(a)
Q266. If a license expires due to CE noncompliance, what must be done to reinstate it?
Correct Answer: C
Explanation: If a license expires due to CE deficiencies, it can be reinstated by completing the missing education and paying the applicable fee within six months.
Citation: TREC Rule §535.92(f)
Q267. What must a license holder do when representing their own property in a sale?
Correct Answer: C
Explanation: When a license holder sells their own property, they must disclose in writing their licensed status to all parties involved in the transaction.
Citation: TREC Rule §535.144(b)
Q268. What is the role of the Texas Real Estate Broker-Lawyer Committee?
Correct Answer: C
Explanation: The Broker-Lawyer Committee develops standard contract forms used by license holders in Texas.
Citation: Texas Occupations Code §1101.252
Q269. What is required before a broker may act as an intermediary?
Correct Answer: C
Explanation: A broker must obtain written consent from both parties before acting as an intermediary in a transaction.
Citation: Texas Occupations Code §1101.559
Q270. What should a license holder do if a client discloses they intend to break fair housing laws?
Correct Answer: B
Explanation: Continuing representation in the face of a client’s intent to discriminate violates TREC ethics and federal law. Withdrawal is required.
Citation: TREC Rule §531.19; 42 U.S.C. §3604
Q271. What duty does a license holder owe when presenting multiple offers to a seller client?
Correct Answer: C
Explanation: All offers must be presented to the client promptly and objectively without bias or delay, per fiduciary duty.
Citation: TREC Rule §535.156(b)
Q272. Which of the following is considered an illegal rebate under Texas law?
Correct Answer: B
Explanation: Rebates must be disclosed to all parties. Secret gifts or payments may be considered illegal inducements or kickbacks.
Citation: TREC Rule §535.147(e)
Q273. What is a license holder required to do if they receive a complaint notice from TREC?
Correct Answer: A
Explanation: License holders must respond to a TREC complaint notice in writing within 14 days to avoid further disciplinary action.
Citation: TREC Rule §533.20
Q274. Which of the following is a legal activity by a licensed sales agent?
Correct Answer: C
Explanation: License holders may not give legal advice but may advise clients to consult a lawyer when appropriate.
Citation: TREC Rule §531.2
Q275. What is the definition of “negligence” in a real estate context?
Correct Answer: C
Explanation: Negligence refers to a license holder’s failure to act with reasonable care, leading to a client or third party’s harm.
Citation: Common Law Tort Principles
Q276. Which entity has the authority to adopt and enforce rules for Texas real estate license holders?
Correct Answer: C
Explanation: TREC is the state agency authorized by the legislature to adopt rules and enforce the Real Estate License Act.
Citation: Texas Occupations Code §1101.151
Q277. How long does a license applicant have to pass the exam after filing their application with TREC?
Correct Answer: D
Explanation: After TREC accepts an application, the applicant has one year (12 months) to pass the licensing exam.
Citation: TREC Rule §535.54(b)
Q278. What is the status of an offer if the buyer dies before the seller accepts?
Correct Answer: B
Explanation: Death of the offeror (buyer) terminates the offer before acceptance. No contract is formed.
Citation: Common Law of Contracts
Q279. What is the effect of failing to display the Consumer Protection Notice on a licensee’s website?
Correct Answer: B
Explanation: TREC requires the Consumer Protection Notice to be clearly posted on licensees’ websites. Failure to do so is a rule violation.
Citation: TREC Rule §531.18(b)
Q280. Which of the following is a valid reason for TREC to deny a license application?
Correct Answer: C
Explanation: TREC may deny licensure based on criminal history related to honesty, trustworthiness, or integrity, including prior fraud convictions.
Citation: Texas Occupations Code §53.021
Q281. A license holder posts a listing on social media with only their team name. What is this a violation of?
Correct Answer: C
Explanation: TREC requires that the broker’s name appear clearly and conspicuously in all advertisements, including team name usage on social media.
Citation: TREC Rule §535.155(b)(1)
Q282. What is the effect of a buyer waiving the option period in the contract?
Correct Answer: A
Explanation: Waiving the option period removes the buyer’s unilateral right to terminate the contract for any reason during that time frame.
Citation: TREC Form 20-17, Paragraph 23
Q283. What is the purpose of the earnest money deposit?
Correct Answer: C
Explanation: Earnest money shows that the buyer is serious about the purchase and provides the seller with some assurance of commitment.
Citation: TREC Form 20-17, Paragraph 5
Q284. What happens if a license holder fails to renew their license within two years of expiration?
Correct Answer: B
Explanation: If more than two years have passed since expiration, the license holder must reapply as a new applicant and retake the exam.
Citation: TREC Rule §535.93(h)
Q285. What type of legal description provides the most accuracy?
Correct Answer: B
Explanation: A lot and block legal description from a recorded subdivision plat is legally recognized and highly precise for conveying real estate.
Citation: Texas Property Code §11.003
Q286. When must the lead-based paint disclosure be provided in a residential transaction?
Correct Answer: B
Explanation: Federal law requires that lead-based paint disclosures be provided to buyers before they become obligated under any contract for housing built before 1978.
Citation: 42 U.S.C. §4852d
Q287. Which document outlines the buyer’s and seller’s rights and obligations in a resale home sale?
Correct Answer: C
Explanation: The One to Four Family Residential Contract is the central legal agreement in most resale home transactions in Texas, outlining duties of both parties.
Citation: TREC Form 20-17
Q288. A sales agent wants to operate under a team name. What must be done first?
Correct Answer: C
Explanation: TREC requires team names to be registered through the sponsoring broker before they are used in advertising or business activity.
Citation: TREC Rule §535.154(c)
Q289. When must the Information About Brokerage Services (IABS) form be posted on a license holder’s website?
Correct Answer: B
Explanation: If a website includes listings or ways to initiate contact about brokerage services, it must include a visible link to the IABS form in a readily noticeable place.
Citation: TREC Rule §531.20(b)
Q290. What should a license holder do when faced with a client request that violates Fair Housing laws?
Correct Answer: C
Explanation: License holders must not comply with or enable discriminatory practices. They must educate the client and refuse to participate in violations.
Citation: 42 U.S.C. §3604; TREC Rule §531.19
Q291. What must a broker do before changing their business entity’s address?
Correct Answer: B
Explanation: A broker must report any change to their business address through the TREC online portal within 10 calendar days.
Citation: TREC Rule §535.91(a)(1)
Q292. Which TREC form replaced the outdated Consumer Protection Notice CN 1-4?
Correct Answer: B
Explanation: As of September 1, 2023, TREC requires the use of the updated Consumer Protection Notice Form CN 1-5.
Citation: TREC Official Forms Update (2023)
Q293. What happens if a license holder fails to designate a business entity broker for their LLC?
Correct Answer: B
Explanation: A licensed business entity must have a designated broker. Without one, it is prohibited from practicing real estate brokerage under Texas law.
Citation: TREC Rule §535.2(k)
Q294. If a license holder is found guilty of a serious violation, what can TREC do?
Correct Answer: B
Explanation: TREC has the authority to suspend or revoke a license if a serious violation of the law or rules is found.
Citation: Texas Occupations Code §1101.656
Q295. Which of the following is a duty of a broker under the Real Estate License Act?
Correct Answer: C
Explanation: A sponsoring broker must properly supervise all sponsored agents to ensure compliance with TREC rules.
Citation: TREC Rule §535.2(e)
Q296. A license holder represents a buyer in a transaction and also owns the property being sold. What must they do?
Correct Answer: A
Explanation: License holders must disclose any ownership interest in a transaction in writing and prior to entering into a contract to avoid conflict of interest or misrepresentation.
Citation: TREC Rule §535.144(b)
Q297. A license applicant is denied due to moral character concerns. How long must they wait before reapplying?
Correct Answer: B
Explanation: If an application is denied due to lack of honesty, trustworthiness, or integrity, the applicant must wait one year to reapply unless otherwise stated by TREC.
Citation: Texas Occupations Code §1101.364
Q298. What action is required of a broker when terminating sponsorship of a sales agent?
Correct Answer: B
Explanation: A sponsoring broker must notify TREC in writing immediately upon terminating the sponsorship of an agent.
Citation: TREC Rule §535.2(e)
Q299. A license holder acts negligently in a transaction, causing financial harm to the buyer. What is the buyer’s recourse?
Correct Answer: B
Explanation: The Texas Real Estate Recovery Trust Account allows consumers to recover damages from licensed individuals who acted fraudulently or negligently when other remedies have failed.
Citation: Texas Occupations Code §1101.603
Q300. A license holder acts negligently in a transaction, causing financial harm to the buyer. What is the buyer’s recourse?
Correct Answer: B
Explanation: The Texas Real Estate Recovery Trust Account allows consumers to recover damages from licensed individuals who acted fraudulently or negligently when other remedies have failed.
Citation: Texas Occupations Code §1101.603

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