Texas Sales Agent Real Estate Practice Examination

This test includes 300 questions based on the 2026 Texas Real Estate Sales Agent exam outline, using verified TREC and official state resources. Each question comes with detailed explanations and official citations, so you can learn as you go and review your performance at the end.

Get Ready for Your Texas Real Estate Certification or Licensing Test Fast!

Texas Sales Agent timed and scored Practice Test with 300 questions.

Welcome to the Texas Sales Agent Real Estate Practice Examination (2026 Edition)

. This full-length, timed practice test is designed to mirror the official TREC Sales Agent exam in both content and difficulty—to ensure you’re fully prepared.

What’s inside:

300 multiple-choice questions covering all prescribed domains (Ownership, Agency, Valuation, Financing, Transfer, Disclosures, Contracts).

Time limit: 240 minutes (same as the real exam) to build your pacing and endurance.

Instant feedback: Toggle each question’s answer and in-depth explanation after submission to reinforce learning.

Scoring scale: 70% passing threshold; your results page will show your raw score, percentage, and domain-by-domain performance.

How to use:

Read each question carefully—no skipping back.

Select the best answer (A–D).

When you finish, click Submit to see your score.

Click Show Answer on any question to review explanations and reference citations.

Tips for success:

Simulate exam conditions: quiet space, no distractions, and full time on the clock.

Review incorrect items immediately—focus on your weakest domains.

Repeat the test until you consistently score above 80%.

Good luck—and happy studying!

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

A. Promote the real estate industry

B. Protect license holders from lawsuits

C. Protect the public from unethical practices

D. Represent brokers in legislative matters

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

A. To provide funds for real estate education

B. To compensate consumers injured by licensee misconduct

C. To reimburse brokers for unpaid commissions

D. To support lobbying efforts

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

A. Paying a referral fee to an unlicensed assistant

B. Negotiating real estate sales for others for compensation

C. Selling your own property without a license

D. Answering phones in a broker’s office

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

A. 2 years

B. 3 years

C. 4 years

D. 7 years

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

A. Report it to their broker only

B. Report it to TREC within 30 days

C. Wait until renewal to disclose

D. Notify the buyer in writing

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

A. Before showing a property

B. At the first substantial communication about a transaction

C. When the buyer signs a contract

D. When the broker signs a listing agreement

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

A. A license holder acting as a property manager

B. A broker representing both buyer and seller in the same transaction

C. A referral agent paid by another broker

D. A buyer working with multiple agents

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

A. Suspension of future license eligibility

B. A fine up to $5,000 per day per violation

C. Automatic granting of a temporary license

D. Written warning from TREC only

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

A. Submit a signed lease agreement

B. File an affiliation request and assume responsibility for the agent

C. Provide the agent with an office and E&O insurance

D. Notify the local board of Realtors

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

A. The broker’s license number

B. A fair housing logo

C. The license holder’s name and sponsoring broker’s name

D. The listing agreement date

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

A. TREC approval prior to the transaction

B. Written consent from both parties to allow the broker to act as intermediary

C. Appointment of separate brokers to each party

D. Disclosure of property defects

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

A. Any licensed sales agent

B. The designated office administrator

C. Only the broker or a designated associate broker

D. The transaction coordinator

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

A. Holding earnest money in the client’s personal account

B. Placing personal funds in the broker’s trust account to cover banking fees

C. Depositing client funds into the broker’s business operating account

D. Transferring escrow to the title company before closing

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

A. The IABS form

B. Consumer Protection Notice CN 1-5

C. The Broker’s Compensation Disclosure

D. Dual Agency Acknowledgment

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

A. $1,000

B. $2,500

C. $5,000

D. $10,000

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

A. Disclosure rule

B. Signage authorization requirement

C. MLS advertising rule

D. Sponsorship reporting requirement

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

A. A TREC logo

B. The broker’s phone number only

C. The license holder’s name and the sponsoring broker’s name

D. The property’s MLS number

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

A. It is automatically suspended for 30 days

B. The license holder is fined but may continue practicing

C. The license expires and may be reinstated upon completion and fees

D. Nothing, if CE is completed within 6 months

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Q19. Which action would violate the Fair Housing Act?

A. Refusing to show property on a Sunday

B. Telling a seller that minority buyers are moving into the neighborhood

C. Charging extra fees for late payments

D. Not disclosing dual agency

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

A. An ad stating “Best deals in town!”

B. An ad stating “Top Producer, 2020” with no documentation

C. A listing with professional photos

D. A broker advertising on social media

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

A. 6 hours

B. 12 hours

C. 18 hours

D. 24 hours

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

A. Submit a written training manual to TREC

B. Provide office space and signage

C. File a sponsorship request and supervise the agent

D. Require the agent to pass the broker exam

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

A. Notify the buyer and seller

B. Wait until license renewal to disclose

C. Report it to TREC within 30 days

D. Take an ethics class before continuing practice

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

A. Issue a cease and desist order only

B. Temporarily suspend the broker’s E&O insurance

C. Suspend or revoke the broker’s license

D. Penalize the agents only, not the broker

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

A. During the first showing

B. At the open house

C. At the first substantive conversation about a transaction

D. After signing the buyer representation agreement

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

A. RESPA

B. DTPA

C. Sherman Antitrust Act

D. ECOA

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

A. Their personal email address

B. The name of their sponsoring broker

C. A link to their TREC profile

D. A license number

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

A. Explaining the meaning of a paragraph in a promulgated contract

B. Advising a client on which form to use

C. Altering a promulgated form to add a new paragraph with legal consequences

D. Telling a client the expiration date of an option period

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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?

A. Notify TREC

B. Refuse to present the offer

C. Present the offer to the seller regardless

D. Contact the buyer directly

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

A. Only with the seller’s written consent

B. If it is not tied to any future transaction or contingent behavior

C. Never — rebates are prohibited

D. Only with TREC pre-approval

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

A. Only if they are representing a family member

B. If they have a financial interest in the property

C. Only after a contract is signed

D. Never, if they are not the agent of record

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Q32. What is the purpose of TREC promulgated forms?

A. To protect real estate brokers from liability

B. To promote standardized and lawful real estate contracts

C. To provide marketing materials to license holders

D. To eliminate the need for attorneys in real estate

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

A. When only one sales agent is involved in the transaction

B. When representing both parties in different counties

C. Only if both parties waive their right to representation

D. When acting as a dual agent with written consent

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

A. The license holder’s personal phone number

B. A statement that the license holder is a REALTOR®

C. The name of the sponsoring broker

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

A. Selling your own property without compensation

B. Managing a family member’s rental as a favor

C. Negotiating the sale of a property for a fee

D. Providing marketing materials for a broker

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

A. Cooperative compensation

B. An MLS override

C. An unauthorized payment

D. A net listing bonus

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

A. Sue the listing agent

B. File a claim against the Texas Real Estate Recovery Trust Account

C. Report the broker to the county clerk

D. Automatically void the transaction

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

A. Notify the city zoning board

B. Get oral consent from the seller

C. Obtain written permission from the owner

D. Schedule a home inspection

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

A. Annual reconciliations are required

B. Monthly reconciliations must be conducted and documented

C. Only third-party accountants may reconcile trust accounts

D. No reconciliation is needed unless funds are disputed

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

A. Sale of a residential property using a license holder

B. Lease of residential property for more than one year

C. Sale of commercial property

D. Contract between buyer and seller prepared by an attorney

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

A. The buyer must submit a notarized letter to the lender

B. The waiver must be in writing and signed by the buyer

C. The appraisal must come in below contract price

D. The seller must countersign the waiver at closing

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

A. To represent licensees in disciplinary hearings

B. To draft and revise promulgated contract forms

C. To conduct license exams

D. To monitor E&O insurance carriers

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

A. Hire another licensee to represent them

B. Notify TREC of the transaction

C. Disclose their licensed status in writing

D. Remove their license from active status

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

A. Automatically revoke the license without a hearing

B. Issue an oral reprimand only

C. Suspend, revoke, or impose an administrative penalty

D. Transfer the case to the local board of Realtors

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

A. Two personal references

B. A fingerprint submission

C. A credit report

D. A notarized statement of intent

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

A. When used for properties valued over $1 million

B. When the license holder is also the buyer

C. Only if the client is familiar with market pricing

D. Only if the seller is fully informed and agrees in writing

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

A. Using a team name in advertisements

B. Offering to pay a referral fee to a past client

C. Offering legal advice to a party in the transaction

D. Recommending a home inspector

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

A. The buyer must terminate before closing

B. The buyer must terminate within the option period and in writing

C. The seller must agree to release earnest money

D. The buyer must provide a home inspection first

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

A. A permitted delay under TREC rules

B. A violation of fiduciary duty

C. A standard industry practice

D. A technical error only if more than 7 days late

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

A. TREC can suspend or revoke the license

B. The broker must mediate with the client

C. The case is referred to the local Realtor board

D. The license is suspended only after a second offense

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

A. Obtain approval from the local MLS

B. Notify the seller by phone

C. Obtain written consent from the property owner

D. File the sign location with TREC

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

A. Appoint one agent to both the buyer and seller

B. Provide advice and opinions to both sides

C. Remain neutral and avoid favoritism

D. Have a co-broker handle negotiations

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

A. To promote real estate careers

B. To generate revenue for the state

C. To protect the public from unqualified licensees

D. To regulate commission structures

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

A. The sender’s license number

B. A link to TREC's complaint form

C. A clear indication of the sender’s licensed status and brokerage name

D. A broker’s signature approval

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

A. Within 1 business day

B. By 5:00 PM on the third business day

C. Within 72 hours of offer acceptance

D. Within 48 hours of closing

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

A. Only if it was a felony

B. Only if it occurred in the past 7 years

C. Always, regardless of when or what type

D. Only if a court order is still active

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

A. No action unless the seller complains

B. Civil liability and possible license suspension

C. A verbal warning from TREC

D. A $50 fine per offense

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

A. Setting appointments with clients

B. Explaining contract terms to buyers

C. Delivering paperwork to a title company

D. Placing signs and lockboxes

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

A. Notify the county clerk within 10 days

B. Send a certified letter to TREC within 15 days

C. Update their contact info in the TREC portal within 10 days

D. No action is required

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

A. Puffing

B. Fraud

C. Negligence

D. Due diligence

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

A. Suspend the agent immediately

B. Report the agent to the local REALTOR® board

C. Take action to ensure the conduct is corrected and notify TREC if required

D. Wait for TREC to conduct an investigation

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

A. $500

B. $1,000

C. $5,000

D. $10,000

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

A. Require clients to use them

B. Disclose affiliations if receiving compensation

C. Avoid referring services entirely

D. Provide only a single preferred vendor

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

A. This is allowed if the assistant is supervised

B. It is a minor infraction

C. It is a violation, as only licensed agents may conduct open houses

D. It is acceptable if no questions are answered

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

A. Only when requested

B. At open houses only

C. It must be prominently displayed on their website and in the office

D. During closings

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Q66. What is considered commingling of funds?

A. Paying vendors from an escrow account

B. Holding funds in a separate escrow account

C. Mixing client funds with broker’s personal or business funds

D. Refunding earnest money after closing

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

A. Designated agency

B. Dual agency

C. Intermediary

D. Transactional neutrality

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

A. Commingling

B. Fraud

C. Conversion

D. Negligent handling of funds

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

A. Only if no TREC-promulgated form exists for that transaction type

B. Only if approved by TREC

C. Never—only TREC forms are allowed

D. When the buyer requests it in writing

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

A. Fraud by omission

B. Puffery

C. Mispricing

D. Unintentional error

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

A. It is void and unenforceable

B. It is valid with parental consent

C. It is voidable at the option of the minor

D. It is fully enforceable by either party

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

A. Directing clients to licensed professionals

B. Recommending lenders to clients

C. Guiding clients to or away from certain areas based on protected characteristics

D. Controlling negotiations between parties

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

A. Aggressive marketing

B. Legal if the flooding was over five years ago

C. A DTPA violation and unethical conduct

D. Acceptable if the buyer waives inspection

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

A. It removes all seller liability

B. It prevents buyer inspections

C. It protects the seller only if no fraud or misrepresentation occurred

D. It voids the buyer’s right to negotiate repairs

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

A. To obtain the lowest commission possible

B. To promote the interests of the buyer with loyalty and full disclosure

C. To act in the interest of both parties equally

D. To prioritize the listing broker’s instructions

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

A. The MLS listing

B. Seller's Disclosure Notice

C. TREC Environmental Hazards Form

D. Lead-Based Paint Addendum

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

A. The seller, unless otherwise agreed

B. The buyer, by default

C. The mortgage lender

D. TREC sets the paying party

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

A. 3 days

B. 5 days

C. 7 days

D. 10 days

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

A. Allowable if the market supports it

B. Permissible if stated as opinion

C. Prohibited as an unsubstantiated guarantee

D. Acceptable if the broker agrees

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

A. Property in a rural area

B. Foreclosures and new construction sales

C. Homes built before 1978

D. Properties sold through FSBO

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

A. Present only the highest offer

B. Wait 24 hours to collect all offers

C. Present all offers promptly to the seller

D. Choose which offer is in the seller’s best interest

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Q82. Which of the following scenarios represents blockbusting?

A. A landlord refusing to rent to someone with poor credit

B. A broker encouraging homeowners to sell because a minority family moved in

C. An agent refusing to show properties based on school quality

D. Steering clients toward homes based on price range

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

A. “This is a safe neighborhood, I live nearby.”

B. “You should check with the local police or crime database.”

C. “There have been no crimes reported recently.”

D. “It’s not something you need to worry about.”

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

A. When the transaction closes

B. When the referral is for a lease

C. Never—it is prohibited

D. When the unlicensed person is related to the client

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

A. Allowed with the seller's approval

B. A violation unless the broker releases the listings

C. Encouraged by TREC to promote free competition

D. Legal if the agent originated the listing

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

A. Rebates are not allowed in any transaction

B. Rebates must be offered equally to all parties

C. Rebates are allowed but must be disclosed in writing

D. Rebates can only be offered to sellers, not buyers

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

A. The seller keeps it

B. It is split 50/50

C. It is refunded to the buyer

D. It is forfeited to the broker

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

A. Previous asking price

B. Recent pest control activity

C. Material defects known to the seller

D. The seller’s reason for moving

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

A. “The schools here are excellent—top rated!”

B. “You can research school ratings at the TEA website.”

C. “I have children in those schools—they’re great.”

D. “The private schools are better than the public ones.”

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

A. A video of property tours

B. Copies of all signed disclosures and contracts

C. Social media history of client interactions

D. Broker’s commission breakdown

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

A. 1 year

B. 2 years

C. 3 years

D. 5 years

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

A. Branding

B. Misleading advertising

C. Legal if disclosed to clients

D. Allowed for teams only

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

A. The agent must be sponsored and licensed

B. The agent must have completed Legal Update I & II

C. The client must sign a waiver

D. The broker must notify TREC

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

A. At contract signing

B. At closing

C. At the first substantive communication

D. When the broker chooses

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

A. Puffery

B. Negligent misrepresentation

C. Comparative marketing

D. Standard advertising

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Q96. Which agency enforces federal fair housing laws?

A. Texas Real Estate Commission (TREC)

B. U.S. Department of Justice

C. Texas Workforce Commission

D. U.S. Department of Housing and Urban Development (HUD)

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

A. All license holders in the MLS

B. Their own sponsored agents

C. Buyers and sellers in their transactions

D. Unlicensed assistants hired by clients

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

A. The team leader’s personal license number

B. The team’s tax ID

C. The sponsoring broker’s name

D. The phone number of all team members

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

A. A Class B misdemeanor

B. A cease and desist letter from TREC

C. A Class A misdemeanor and possible administrative penalties

D. Civil penalty but no criminal charges

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

A. Legal for sales agents

B. A violation of federal law

C. Allowed in Texas if the call is live

D. Permitted if under broker supervision

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

A. Submit a notarized form to the county clerk

B. Register the name with the Secretary of State

C. Notify TREC in writing and receive acknowledgment

D. Include it on advertising first, then notify TREC

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

A. Only material facts that favor the client must be disclosed

B. Confidential information must always be disclosed to buyers

C. All known material facts about the property must be disclosed to all parties

D. Disclosure is optional unless asked in writing

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

A. Disclose the bonus in writing before closing

B. Report the bonus on their annual TREC renewal

C. Refuse the bonus if not paid through the broker

D. Notify the buyer only after payment is received

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

A. Property owners selling their own homes

B. Attorneys negotiating leases for clients

C. Apartment locators receiving referral fees

D. Corporate officers transferring company-owned properties

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

A. Nothing, as inspections are optional

B. A lawsuit under the Deceptive Trade Practices Act (DTPA)

C. TREC automatically revoking the license

D. The buyer being unable to negotiate repairs

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

A. Nothing unless there is a complaint

B. TREC will freeze all escrow funds

C. It is considered a violation of trust account management rules

D. It is the agent’s responsibility, not the broker’s

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

A. Valid

B. Executory

C. Void

D. Unenforceable

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

A. Any broker or agent

B. A consumer who suffered damages due to fraud or misrepresentation

C. Any person denied a license

D. A seller who cancels a contract

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

A. Nothing, since CMAs are just estimates

B. The broker may be liable under DTPA for misrepresentation

C. The client must prove damages before reporting to TREC

D. It is considered acceptable marketing strategy

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

A. Information About Brokerage Services (IABS)

B. Listing Agreement

C. Buyer Representation Agreement

D. TREC Consumer Protection Notice

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

A. 16 years

B. 18 years

C. 20 years

D. 21 years

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

A. Explaining the purpose of a TREC form

B. Advising a client to consult an attorney

C. Modifying the language of a promulgated contract form

D. Completing a property disclosure form

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

A. Texas Workforce Commission

B. Federal Communications Commission

C. Texas Real Estate Commission

D. Better Business Bureau

114 / 300

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

A. Submit fingerprints to the broker

B. Complete pre-licensing coursework and receive eligibility from TREC

C. Pass a background check from the local police department

D. Receive a sponsoring broker’s signature

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

A. Information about proximity to shopping malls

B. Whether the home has been professionally staged

C. Known material defects in the property

D. The seller’s motivation to move

116 / 300

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

A. A warning letter

B. A fine and mandatory education

C. No consequence unless a complaint is filed

D. License revocation by the Texas Attorney General

117 / 300

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

A. A separate intermediary license

B. Written consent from both parties

C. A verbal agreement with both buyer and seller

D. Approval from the title company

118 / 300

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

A. Approval from the board of REALTORS®

B. A CPA audit every 6 months

C. Broker supervision and proper recordkeeping

D. A bond issued by the state comptroller

119 / 300

Q119. Which of the following is considered commingling?

A. Depositing earnest money into a trust account

B. Holding a check for delivery per instructions

C. Depositing client funds into a personal account

D. Refunding unused escrow funds to a buyer

120 / 300

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

A. Every calendar year

B. Two years after the license was issued

C. After completing one renewal cycle of continuing education

D. Every five years with additional CE hours

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

A. Automatic license suspension

B. A 6-month grace period to complete CE

C. The license expires and must be reactivated with late fees and CE completion

D. The broker may complete the CE on their behalf

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

A. Nothing—referrals are always permitted

B. A formal business contract

C. Disclosure of any financial interest in the vendor

D. Verbal consent from the broker

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

A. Hosting an open house

B. Discussing negotiation terms with a buyer

C. Delivering paperwork to clients without explanation

D. Explaining contract clauses to a seller

124 / 300

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

A. Only at closing

B. Only if the consumer requests it

C. At the time of listing a property

D. On the license holder’s website and in their place of business

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

A. Suspension of the license only

B. Civil liability under DTPA

C. A warning from TREC with no penalty

D. Automatic license revocation

126 / 300

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

A. That agents work only on listings

B. That all agents file taxes on time

C. That training is documented and reviewed

D. That team leaders are paid bonuses for training

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

A. They are illegal in Texas under all circumstances

B. They are permitted if the client agrees in writing and understands the terms

C. They are only used in commercial transactions

D. They are allowed only with court approval

128 / 300

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

A. To prepare new license applicants for the state exam

B. To meet CE requirements related to industry changes and law updates

C. To fulfill broker ethics training only

D. To substitute for GRI designation courses

129 / 300

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

A. Their license is immediately suspended for 5 years

B. They may continue working until renewal

C. They must report it to TREC and may face disciplinary action

D. They automatically lose all CE credit

130 / 300

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

A. Calling a client after 5 PM

B. Offering a bonus to a cooperating agent

C. Discriminating against a buyer based on national origin

D. Hosting a broker open house

131 / 300

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

A. Refuse the fee if it is over $500

B. Ensure the out-of-state broker is not actively engaged in the transaction in Texas

C. Notify the Texas Attorney General

D. Have the client sign a referral acknowledgment

132 / 300

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

A. Brokers independently deciding to raise their own commission rates

B. Two brokers agreeing to divide geographic territories

C. Advertising a standard market commission

D. Offering a discount to clients who waive inspections

133 / 300

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

A. Seller’s Disclosure Notice

B. Consumer Protection Notice

C. Information About Brokerage Services (IABS)

D. Fair Housing Notice

134 / 300

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

A. Say it hasn’t flooded recently

B. Tell the buyer to ask the neighbors

C. Refer the buyer to FEMA flood maps or an insurance provider

D. Say that the seller has not disclosed anything

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

A. Exclusive right to sell

B. Exclusive agency

C. Net listing

D. Open listing

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

A. Delegating clerical work to an unlicensed assistant

B. Representing both parties with written consent

C. Paying a commission to an unlicensed person for procuring a client

D. Holding earnest money for the title company

137 / 300

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

A. No issue if the broker is informed afterward

B. The agent is engaging in an unauthorized practice of real estate

C. Sales agents must work through or with the permission of their broker

D. TREC must approve such negotiations in writing

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

A. Amendment

B. Addendum

C. Disclosure

D. Counteroffer

139 / 300

Q139. How long must brokers retain transaction records?

A. One year

B. Two years

C. Three years

D. Five years

140 / 300

Q140. Which law prohibits discrimination based on familial status?

A. Equal Credit Opportunity Act

B. Americans with Disabilities Act

C. Fair Housing Act

D. Texas Property Code

141 / 300

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

A. Notify their broker only

B. Notify TREC within 30 days

C. Respond only if found guilty

D. Do nothing unless fined

142 / 300

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

A. They must include the word “team” or “group”

B. They must be registered with the local MLS

C. They can include “realty” or “broker” freely

D. No rules apply if part of a franchise

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

A. Before closing

B. At the time of listing

C. At first substantive communication about real estate services

D. Only when requested by the client

144 / 300

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

A. Legal if the broker approves

B. Illegal under RESPA

C. Allowed for leases only

D. Permissible if under $50

145 / 300

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

A. Managing personal rental properties

B. Helping a friend sell their home for free

C. Selling properties for another person and earning compensation

D. Posting property listings on social media

146 / 300

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

A. Ignore it unless a fine is imposed

B. Respond in writing within the timeframe given

C. Discuss it with their broker only

D. Wait to see if further action is taken

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

A. No consequence

B. Potential license suspension or fines

C. Required ethics training only

D. Referral to the attorney general

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

A. The agents are solely responsible

B. The broker may face disciplinary action

C. TREC will issue a warning only

D. There are no penalties for supervision issues

149 / 300

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

A. A penalty for canceling a contract

B. A payment to the seller for inspection rights

C. A deposit on the down payment

D. A bonus to the listing broker

150 / 300

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

A. Negligence

B. Conversion

C. Commingling

D. Delegation

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

A. Advertising one’s own property for sale

B. Showing rental units as a salaried employee

C. Charging a friend a fee to negotiate their home purchase

D. Providing a market analysis for a neighbor for free

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

A. Collect state taxes

B. Promote the real estate profession

C. License and regulate real estate professionals

D. Represent licensees in legal disputes

153 / 300

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

A. Immediate license revocation

B. A warning letter only

C. Up to a $5,000 administrative fine per day

D. Referral to a local board of REALTORS®

154 / 300

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

A. Commingling funds

B. Delaying commission payments

C. Using client funds for personal use

D. Depositing earnest money late

155 / 300

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

A. Get TREC approval

B. Have written consent from both parties

C. Obtain oral consent from buyer and seller

D. Assign the same agent to both parties

156 / 300

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

A. A 90-day grace period applies automatically

B. The license expires and must be reinstated with penalties

C. The license remains active during renewal processing

D. They may continue practicing for 30 days

157 / 300

Q157. Who may maintain an escrow or trust account?

A. Any license holder

B. Brokers only

C. TREC staff

D. Unlicensed assistants under supervision

158 / 300

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

A. Report it to TREC

B. Share it with the client

C. Decline or disclose it in writing

D. Submit it to the broker

159 / 300

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

A. 6 months

B. 1 year

C. 2 years

D. 4 years

160 / 300

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

A. The buyer always

B. The seller always

C. It’s negotiated in the contract

D. TREC assigns the cost

161 / 300

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

A. It amends the original contract while keeping all other terms intact

B. It immediately binds the buyer to new terms

C. It terminates the original offer and creates a new one

D. It guarantees acceptance if within 72 hours

162 / 300

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

A. To protect clients against fraud

B. To cover intentional misrepresentation

C. To cover mistakes or negligence by the agent

D. To reimburse earnest money disputes

163 / 300

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

A. One to Four Family Residential Contract (Resale)

B. New Construction Contract

C. Lease with Option to Buy Form

D. Commercial Property Sales Contract

164 / 300

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

A. Remain silent if not directly asked

B. Encourage the buyer to hire an inspector

C. Disclose the known defect to the buyer

D. Ask the seller to fix it before closing

165 / 300

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

A. Acts as a silent business partner

B. Provides legal advice for contracts

C. Supervises and is responsible for the agents' actions

D. Manages commission distribution for the title company

166 / 300

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

A. At closing

B. Before showing any property

C. At the first substantive communication

D. After the buyer signs the sales contract

167 / 300

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

A. The duty to market a property to the public

B. A legal obligation to act in another's best interest

C. The responsibility to pay property taxes on time

D. The right to delegate contract signing

168 / 300

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

A. Texas Property Code

B. Texas Deceptive Trade Practices Act

C. Texas Real Estate License Act (TRELA)

D. Texas Administrative Code

169 / 300

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

A. Breach of loyalty

B. Commingling

C. Unauthorized compensation

D. Fraudulent inducement

170 / 300

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

A. The sales price of the listing

B. The square footage of the property

C. The license holder’s name and brokerage name

D. The license number of the broker

171 / 300

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

A. The agent’s license number

B. A link to their personal websiteC

C. The broker’s name in a prominent location

D. The name of their title company

172 / 300

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

A. The transaction is automatically void

B. TREC may impose disciplinary action

C. The broker receives a warning

D. The title company handles the issue

173 / 300

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

A. Legal puffing

B. An opinion, not actionable

C. A DTPA violation for misrepresentation

D. Encouraged marketing language

174 / 300

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

A. Registered with TREC before use

B. Used only in team branding

C. Approved by the local REALTOR® board

D. Shown only on websites

175 / 300

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

A. It allows the buyer to cancel only if the inspection fails

B. It grants the buyer an unrestricted right to terminate within the option period

C. It ensures automatic refunds

D. It waives all seller disclosures

176 / 300

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

A. Dual agency consent

B. Written consent from both parties

C. Verbal agreement from the broker

D. Third-party appointment by TREC

177 / 300

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

A. It must be deposited within 24 hours

B. It must be delivered by 5:00 PM the next day

C. It must be delivered by the close of business on the third business day

D. It must be returned to the buyer automatically after 7 days

178 / 300

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

A. Illegal dual agency

B. Properly executed intermediary with appointments

C. Prohibited unless both parties waive confidentiality

D. Allowed only in commercial transactions

179 / 300

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

A. Texas Real Estate Commission (TREC)

B. Department of Justice

C. Texas Association of REALTORS®

D. MLS Ethics Committee

180 / 300

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

A. It eliminates all seller liability

B. It protects the seller only if no fraud or misrepresentation occurred

C. It removes buyer inspection rights

D. It overrides statutory disclosure laws

181 / 300

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

A. Blockbusting, which violates fair housing laws

B. Acceptable if the homeowner initiated the discussion

C. Legal if the market supports it

D. Protected as free speech

182 / 300

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

A. Unauthorized practice of law

B. Due diligence

C. A minor infraction

D. Breach of fiduciary duty

183 / 300

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

A. 5 days

B. 10 days

C. 15 days

D. 30 days

184 / 300

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

A. Dual agency

B. Intermediary with appointments

C. Prohibited under Texas law

D. Designated representation

185 / 300

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

A. Giving a seller’s contact information to a buyer

B. Telling a buyer the neighborhood is “very safe”C

C. Failing to disclose a known roof defect

D. Refusing to negotiate the sales price

186 / 300

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

A. The license holder only

B. The team leader

C. The sponsoring broker

D. The buyer or seller

187 / 300

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

A. The buyer must request it in writing

B. The agreement must be in writing and signed

C. The agent must hold a broker license

D. The seller must verbally agree before closing

188 / 300

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

A. Prior to showing any property

B. At the time of contract execution

C. At the first substantive communication about a real estate transaction

D. When requested by a client

189 / 300

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

A. To fund TREC’s operations

B. To pay commissions when brokers go bankrupt

C. To reimburse consumers harmed by license holder misconduct

D. To cover legal fees for license holders

190 / 300

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

A. An acceptable opinion

B. Puffery

C. Negligence

D. Fraud

191 / 300

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

A. The manager’s social security number

B. A termination date and fee schedule

C. TREC approval

D. Broker’s bond guarantee

192 / 300

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

A. Contact the buyer

B. Notify their broker and insurance carrier

C. Close any pending transactions

D. File a complaint with TREC

193 / 300

Q193. What must a license holder do before negotiating a second offer on a property already under contract?A. Get permission from the title company

A. Get permission from the title company

B. Terminate the first contract

C. Disclose the existing contract status to the second buyer

D. File a backup contract with TREC

194 / 300

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

A. To compensate brokers who suffer losses

B. To fund continuing education programs

C. To reimburse consumers harmed by licensee misconduct

D. To offset court costs for license holders

195 / 300

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

A. A fee paid to extend the closing date

B. Non-refundable consideration for the option period

C. A deposit to secure earnest money

D. The broker’s commission hold

196 / 300

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

A. Acceptable under fair housing

B. A breach of confidentiality

C. Normal business practice

D. Mandatory disclosure

197 / 300

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

A. Working with both buyer and seller in different counties

B. Using misleading advertising without broker name

C. Paying a referral fee to another broker

D. Using TREC forms for all transactions

198 / 300

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

A. Nothing—it’s a civil matter only

B. Suspend or revoke their license

C. Offer mediation services

D. Pay the buyer directly

199 / 300

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

A. 1 year

B. 3 years

C. 4 years

D. 7 years

200 / 300

Q200. Which of the following actions is considered commingling?

A. Depositing earnest money in the broker’s operating account

B. Paying commissions to another broker

C. Refunding excess escrow after closing

D. Holding earnest money in a title company trust account

201 / 300

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

A. Verbal agreement from both parties

B. Dual agency license endorsement

C. Written consent from both buyer and seller

D. Filing a form with TREC

202 / 300

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

A. To promote real estate investment

B. To assist brokers with marketing

C. To protect the public through licensing and regulation

D. To enforce federal real estate laws

203 / 300

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

A. Posting a rental on social media

B. Discussing market conditions at a party

C. Helping a neighbor find a buyer for compensation

D. Referring someone to a title company

204 / 300

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

A. The broker may receive a warning letter

B. Only the agent is held accountable

C. The broker can face disciplinary action from TREC

D. No action unless a complaint is filed

205 / 300

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

A. Before a showing

B. At the time of first substantial communication

C. When an offer is submitted

D. At closing

206 / 300

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

A. Do so if the client insists

B. Disclose it only if discovered by the buyer

C. Refuse and advise the client of legal risks

D. Tell the client it's common in the industry

207 / 300

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

A. $500

B. $1,000

C. $5,000

D. $10,000

208 / 300

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

A. Race

B. National origin

C. Age

D. Religion

209 / 300

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

A. Report it to their broker only

B. Report it to TREC within 30 days

C. Disclose it at renewal

D. Notify the local association

210 / 300

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

A. Texas Fair Housing Act

B. Texas Consumer Credit Code

C. Texas Deceptive Trade Practices Act

D. Texas Insurance Code

211 / 300

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

A. A new home never occupied

B. A property transferred between spouses

C. A single-family home sold through a broker

D. A foreclosure sale by a lender

212 / 300

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

A. Revoke the license

B. Require restitution to a consumer

C. Issue a reprimand

D. Impose an administrative penalty

213 / 300

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

A. Present only the highest offer

B. Present all offers to the seller promptly

C. Wait for the seller to ask for more offers

D. Keep backup offers secret until the first one fails

214 / 300

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

A. Texas Deceptive Trade Practices Act (DTPA)

B. Federal Trade Commission Act

C. Texas Residential Property Disclosure Act

D. Sherman Antitrust Act

215 / 300

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

A. Represent real estate agents in court

B. Create financing programs for first-time buyers

C. License and regulate real estate professionals

D. Set property tax rates in each county

216 / 300

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

A. The word “agency” to indicate brokerage

B. The individual agent’s license number

C. The word “team” or “group” clearly in the name

D. The phone number of the sponsoring broker

217 / 300

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

A. Office dress codes and personal hygiene

B. Compensation limits for all agents

C. Agency procedures, recordkeeping, and advertising

D. Travel reimbursement procedures

218 / 300

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

A. The buyer’s attorney

B. The seller’s broker

C. The escrow officer or title company

D. The mortgage lender

219 / 300

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

A. Written mutual agreement of both parties

B. Verbal notice to the broker

C. Expiration of the listing term

D. Buyer’s written offer

220 / 300

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

A. It’s forfeited to the seller

B. It’s refunded to the buyer

C. It’s split evenly between parties

D. It’s applied to closing costs

221 / 300

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

A. Notify the seller’s attorney

B. Get written permission from the owner

C. Wait until the listing appears on MLS

D. Call the city zoning office

222 / 300

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

A. If instructed by their sponsoring agent

B. If the transaction has exceeded 90 days with no closing

C. If ordered by a court or upon interpleading

D. If the buyer provides written notice of termination

223 / 300

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

A. Their license is automatically revoked

B. TREC suspends their license pending review

C. No impact unless it was real estate-related

D. They are fined but can continue working

224 / 300

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

A. CN 1-4

B. CN 1-3

C. CN 1-5

D. CN 2-1

225 / 300

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

A. $500 civil penalty only

B. Class C misdemeanor

C. Class A misdemeanor and possible civil penalties

D. Suspension of future license eligibility

226 / 300

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

A. Is not liable if unaware

B. Must immediately report the person to TREC

C. May be disciplined by TREC for aiding unlicensed activity

D. Is exempt if the person is a family member

227 / 300

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

A. Conversion

B. Interpleading

C. Commingling

D. Escrow accounting

228 / 300

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

A. Steering

B. Channeling

C. Blockbusting

D. Redlining

229 / 300

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

A. Monthly audits by TREC

B. Written notice to clients and proper account setup

C. Use of an escrow company instead

D. Appointment of a financial officer

230 / 300

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

A. Weekly in-person team meetings

B. A written policies and procedures manual

C. Monthly performance evaluations

D. Separate office leases for each agent

231 / 300

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

A. Nothing unless their address also changes

B. Notify their broker within 30 days

C. Submit a name change request to TREC

D. Update the MLS and business cards

232 / 300

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

A. Minor infraction with no penalty

B. A potential violation of TREC rules

C. Automatic revocation of license

D. Disqualification from intermediary status

233 / 300

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

A. The agent is suspended automatically

B. The agent may continue practicing independently

C. The agent's license becomes inactive

D. TREC assigns the agent to another broker

234 / 300

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

A. Yes, if disclosed in writing

B. Yes, as long as the title company is licensed

C. No, it violates RESPA

D. No, unless approved by the broker

235 / 300

Q235. What must a broker do when ceasing operations?

A. Notify all clients and agents in writing

B. Inform the MLS within 7 days

C. Notify TREC and return the broker’s license certificate

D. Conduct a public notice in the local newspaper

236 / 300

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

A. Licensee’s full name and home address

B. Broker’s license number

C. A link to the Consumer Protection Notice and IABS form

D. Copies of all active listings

237 / 300

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

A. Assigning agents to both buyer and seller

B. Remaining neutral in negotiations

C. Disclosing confidential information without permission

D. Explaining contract terms to the client

238 / 300

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

A. The assistant only

B. TREC

C. The license holder and their broker

D. No one unless a complaint is filed

239 / 300

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

A. To the public

B. To their broker

C. To the client

D. To the MLS

240 / 300

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

A. Nothing, this is allowed under dual agency

B. The broker must hold both payments in escrow

C. The buyer must sign a dual compensation waiver

D. Both parties must consent in writing

241 / 300

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

A. A 6-month grace period is granted

B. The license is placed on inactive status automatically

C. The license expires and must be reinstated

D. No consequence until the next renewal cycle

242 / 300

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

A. It must be delivered to the title company within 48 hours

B. It is optional and not addressed in contracts

C. It must be delivered by the third business day after the effective date

D. It must be refunded immediately upon termination

243 / 300

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

A. The agent must be a member of a local board and NAR

B. The agent must display their license number

C. The agent must include TREC’s Consumer Notice

D. Nothing—any licensee may use the term

244 / 300

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

A. The local REALTOR® board

B. The sales agent only

C. The sponsoring broker

D. TREC's marketing division

245 / 300

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

A. Present it only if it's in writing

B. Present all offers promptly, even if lower than others

C. Wait for multiple offers before presenting

D. Only present the highest offer

246 / 300

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

A. A listing where the agent receives a fixed fee

B. A listing where the seller receives a guaranteed minimum amount and the broker keeps the excess

C. A listing requiring no seller signature

D. An agreement used only for commercial properties

247 / 300

Q247. Which activity by a license holder constitutes an antitrust violation?

A. Refusing to co-op with another agent

B. Discussing commission rates at a local association meeting

C. Splitting commission with another licensed broker

D. Declining to represent both parties in a transaction

248 / 300

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

A. Sign a cancellation agreement

B. Request a formal termination letter

C. Do nothing; the seller keeps the option fee by default

D. Provide a signed release of earnest money

249 / 300

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

A. Net listing

B. Exclusive agency

C. Open listing

D. Exclusive right to sell

250 / 300

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

A. When licensed by TREC

B. When employed by a broker who is a REALTOR®

C. Only if the license holder is an active member of NAR

D. If the brokerage is a member of the MLS

251 / 300

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

A. $500 fine

B. Cease and desist letter only

C. Class A misdemeanor and administrative penalty

D. License suspension

252 / 300

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

A. $25,000

B. $50,000

C. $75,000

D. $100,000

253 / 300

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

A. Putting personal funds into a business account

B. Depositing client funds into a personal account

C. Mixing client funds with escrow account funds

D. Keeping separate accounts for different clients

254 / 300

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

A. Provide the latest police report

B. Offer personal opinions about neighborhood safety

C. Direct the client to local law enforcement or official crime data sources

D. State they are not allowed to answer

255 / 300

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

A. Refunded to the buyer

B. Retained by the seller

C. Split with the broker

D. Applied to closing costs

256 / 300

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

A. 8 hours

B. 10 hours

C. 15 hours

D. 18 hours

257 / 300

Q257. How long must a broker maintain transaction records?

A. 1 year

B. 2 years

C. 3 years

D. 5 years

258 / 300

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

A. A fine of up to $500

B. Suspension or revocation of license

C. Mandatory CE course

D. Nothing unless a second notice is missed

259 / 300

Q259. What must a license holder do before offering a guaranteed buyout to a seller?

A. Obtain permission from the buyer

B. Register the guarantee with TREC

C. Make full written disclosure and have funds to fulfill the offer

D. File a special form with the escrow agent

260 / 300

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

A. Failing to respond to client emails

B. Committing a felony unrelated to real estate

C. Declining a buyer request to waive inspections

D. Advertising without using MLS

261 / 300

Q261. Which of the following would be considered commingling?

A. Depositing earnest money into the broker’s personal account

B. Holding client funds in a trust account

C. Paying office rent from business earnings

D. Placing broker funds into the trust account for accounting purposes

262 / 300

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

A. Failing to deposit earnest money

B. Withdrawing funds from escrow for personal use

C. Accepting a bonus check from a client

D. Forgetting to return a phone call

263 / 300

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

A. Nothing unless a complaint is filed

B. The broker may be held liable for their actions

C. TREC will suspend the agents

D. Only the agents are disciplined

264 / 300

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

A. Verbal agreement with a client

B. Broker approval and a written agreement

C. Listing with MLS only

D. Completion of CE hours

265 / 300

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

A. TAR Buyer Representation Form

B. TREC 1–4 Family Residential Contract

C. Broker Compensation Agreement

D. Texas Homestead Affidavit

266 / 300

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

A. Submit a letter of apology to TREC

B. Reapply and retake the exam

C. Complete required CE and pay the reinstatement fee

D. Wait six months

267 / 300

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

A. Disclose their status to TREC only

B. Avoid disclosure to avoid bias

C. Disclose their license status in writing to all parties

D. Use a third-party intermediary

268 / 300

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

A. Enforces licensing rules

B. Reviews license applications

C. Drafts and revises contract forms

D. Conducts CE courses

269 / 300

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

A. Written consent from at least one party

B. Oral disclosure at first contact

C. Written consent from both buyer and seller

D. Appointment by the MLS

270 / 300

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

A. Report the client to HUD

B. Immediately withdraw from representation

C. Follow instructions but note it in writing

D. Proceed cautiously and consult legal counsel

271 / 300

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

A. To present only the most competitive offer

B. To rank the offers by price and present the list

C. To present all offers objectively and promptly

D. To advise the seller which offer to accept

272 / 300

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

A. A discount offered to a buyer at closing and disclosed to all parties

B. A gift card given secretly to a referring client

C. A brokerage fee discount advertised on social media

D. A broker rebate paid by check and recorded on the settlement statement

273 / 300

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

A. Respond within 14 days

B. Ignore it unless legal action follows

C. Immediately cease all real estate activity

D. Contact the buyer or seller to resolve it informally

274 / 300

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

A. Paying another sales agent directly for a referral

B. Holding escrow funds in their personal bank account

C. Advising a client to consult an attorney for legal questions

D. Negotiating a commission with a buyer without broker involvement

275 / 300

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

A. Intentional misrepresentation

B. Fraudulent concealment

C. Failure to use reasonable care resulting in harm

D. Providing legal advice without a license

276 / 300

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

A. Texas Department of Insurance

B. State Bar of Texas

C. Texas Real Estate Commission

D. Texas Association of Realtors

277 / 300

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

A. 3 months

B. 6 months

C. 12 months

D. 24 months

278 / 300

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

A. It remains valid unless revoked

B. It automatically terminates

C. The buyer’s heirs may enforce it

D. The listing broker may proceed

279 / 300

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

A. It results in a warning only

B. It is a violation subject to disciplinary action

C. It is acceptable if displayed in office

D. TREC will send a compliance reminder

280 / 300

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

A. The applicant had a prior bankruptcy

B. The applicant failed the exam once

C. The applicant was convicted of fraud five years ago

D. The applicant had no prior real estate experience

281 / 300

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

A. MLS policy

B. Fair Housing laws

C. TREC advertising rules

D. NAR Code of Ethics

282 / 300

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

A. They lose the right to terminate for any reason

B. They still have 7 days to inspect the property

C. They are entitled to an automatic price reduction

D. The contract is canceled automatically

283 / 300

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

A. To pay the buyer’s agent commission

B. To fund the buyer’s closing costs

C. To demonstrate the buyer’s serious intent to follow through on the purchase

D. To reimburse the seller’s inspection expenses

284 / 300

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

A. They must pay a double penalty fee

B. They may not renew and must reapply as a new applicant

C. They must appeal to the Texas Real Estate Commission

D. They automatically receive a provisional license

285 / 300

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

A. Only reviewing contract paperwork

B. Approving advertising and ensuring compliance with laws

C. Setting commission rates

D. Assigning clients directly

286 / 300

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

A. Street address

B. Lot and block from a recorded plat

C. Informal neighborhood name

D. Listing agreement summary

287 / 300

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

A. At closing

B. Before the buyer signs the contract

C. After the inspection is complete

D. When the appraisal is ordered

288 / 300

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

A. Deed of trust

B. General warranty deed

C. One to Four Family Residential Contract (Resale)

D. Closing disclosure

289 / 300

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

A. Get approval from the local board of REALTORS®

B. Register the team name with the Secretary of State

C. Register the team name with TREC under their sponsoring broker

D. Nothing — team names are not regulated

290 / 300

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

A. Only if the agent does not use a business card

B. If the website includes listings or contact forms

C. Only on broker-managed sites

D. Not required if the broker uses social media instead

291 / 300

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

A. Notify the client that it may slow the sale process

B. Follow instructions but document the request

C. Decline the request and educate the client on the law

D. Refer the client to another agent

292 / 300

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

A. Submit a written request to the local board

B. Update the TREC licensing portal within 10 days

C. Send a certified letter to the Texas Secretary of State

D. Notify all current clients by mail

293 / 300

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

A. CN 1-3

B. CN 1-5

C. CN 2-1

D. CN 1-6

294 / 300

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

A. Nothing unless the LLC closes a transaction

B. The LLC may not engage in brokerage activity

C. TREC will automatically assign a broker of record

D. The LLC is exempt if it has fewer than three members

295 / 300

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

A. Refer the case to a local REALTOR® board

B. Suspend or revoke the license

C. Require the broker to change offices

D. Issue a buyer refund directly

296 / 300

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

A. Provide legal advice to clients

B. Monitor all real estate advertising personally

C. Supervise sponsored sales agents

D. Appoint lawyers to interpret contracts

297 / 300

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

A. Disclose their dual role in writing to all parties

B. Submit an appraisal before listing

C. Use an attorney to represent both sides

D. Inform TREC and wait for approval

298 / 300

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

A. 90 days

B. 1 year

C. 2 years

D. There is no waiting period

299 / 300

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

A. Mail a notice to the agent

B. Notify TREC in writing immediately

C. File a disassociation form within 10 days

D. Wait until the agent finds another sponsor

300 / 300

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

A. File a grievance with the MLS

B. File a claim through the Texas Real Estate Recovery Trust Account

C. Submit a refund request to TREC

D. Seek payment from the broker’s E&O insurance directly

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