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TEXAS STATE PORTION REAL ESTATE EXAM QUESTIONS
WITH COMPLETE SOLUTIONS GUARANTEED PASS BRAND
NEW 2025
Who is responsible for any wrongs done by a salesperson while acting within the scope of the agency agreement? - ANSWER - >The broker is liable for the wrongdoing of his or her salespersons. The principal is liable for any wrongs committed by the broker while acting within the scope of the agency agreement. what is the distinction between sales contracts and option contracts? - ANSWER - >One characteristic of sales contracts is mutual obligation. Option contracts lack mutual obligation. The buyer in an option contract is not obligated to buy. A listing agreement must contain: - ANSWER - >a standard street address is sufficient. If the commission investigates a complaint and determines that an individual's real estate license should be suspended or revoked, the licensee is entitled to a hearing before the commission within how many days after the commission reaches its decision? - ANSWER - >A licensee who faces suspension or revocation of their license is entitled to a hearing within 30 days of the commission reaching their decision. Which of the licensed entities does not fall under the regulatory authority of the Texas Real Estate Commission? - ANSWER - >The Texas Appraiser Licensing and Certification Board has jurisdiction over state licensed and certified appraisers. In addition to licensing brokers and salespersons, the Texas Real Estate Commission is responsible for
licensing real estate inspectors and for regulation of companies that sell and issue residential service contracts ("home warranties"). (Article 65736, Vernon's Texas Civil Statutes. A licensee in Texas may not practice law, unless licensed and authorized to do so in Texas. Practicing law includes altering contracts, or drawing up: - ANSWER - >a deed, deed of trust, will, or other written instrument that may transfer or affect the title to land. What penalties may a licensee who breaches the agency relationship face? - ANSWER - >A licensee who breaches the agency relationship may be sued for damages, termination of the contract, and/or non- payment of the commission. Undisclosed dual agency is: - ANSWER - >a violation of the TRELA. What is the composition of the Broker-Lawyer Committee? - ANSWER -
Six broker members are appointed by the Texas Real Estate Commission; six attorney members are appointed by the President of the State Bar of Texas. The appointees serve a term of six years with one-third of them being appointed every two years. A licensee must disclose any existing agency relationships to a new client. This disclosure: - ANSWER - >may be done orally or in writing. A broker may do which of the following for an individual without actually representing the individual? - ANSWER - >A broker may obtain financing, assist in locating a property, and prepare a contract or lease for an individual without representing the individual. A real estate licensee must notify the real estate program manager if: - ANSWER - >A licensee must notify the real estate program manager within 20 days of receiving any criminal complaint, information,
married. The listing contract is: - ANSWER - >voidable at the option of the minor. Which of the following people would need to obtain a real estate license if they were involved in a real estate activity? A. the executor of an estate B. a court-appointed guardian C. a trustee of the bankruptcy court D. one who sells lots in a mobile home park - ANSWER - >D. The sale of land/lots is an act of brokerage and requires that one have a license if he or she is not the owner of the lot. The other three answers are listed as people who do not need a license in Section 3 of the Texas Real Estate License Act. An agency relationship may be terminated by - ANSWER - >expiration of time, agreement, rescission, abandonment, or by the death of either party. A property owner may claim a homeowner's exemption in Texas on a residence that is both owned and occupied. The exemption reduces the assessed value of the residence by - ANSWER - >$7,000 dollars A broker must maintain a place of business in the state of Texas. If the location changes, the broker has how long to notify the commission? - ANSWER - >The broker must notify the commission of any change of address within 10 days. What happens when an applicant for licensure has failed to pass the competency examination within the prescribed six-month period? - ANSWER - >The applicant must submit a new application meeting all current requirements.
The written disclosure of agency relationships is not required if the: - ANSWER - >proposed transaction is for a residential lease for not more than one year and no sale is being considered. Disclosure is also not required if the licensee meets with a party who is represented by another licensee. An agency relationship may be created in all of the following ways except: A. by ratification. B. by estoppel. C. by apparent authority D. by assumed authority - ANSWER - >D. An agency relationship may be created in all of these ways except for by assumed authority. Dave defaulted on his mortgage loan and the property was ordered to be sold at a foreclosure sale. Dave may redeem his property: - ANSWER
A property owner in default may redeem his or her property up until the property is sold, under the equitable right of redemption. What should a real estate broker do with licenses coming into his or her possession? - ANSWER - >prominently display them in his or her place of business If a broker is working as an intermediary to both parties in a transaction, the broker may collect commissions from both parties if: - ANSWER - >each party knows exactly how much commission is collected from the other party and receives full disclosure of all facts. A contract may be terminated by: - ANSWER - >default, performance, mutual agreement, rescission, or by the fact that it is impossible to perform.
What is a counteroffer? - ANSWER - >A rejection of an offer and a presentation of new terms and/or conditions. It is not valid until both parties have signed it. Parties can be compelled to take a dispute to mediation prior to being able to initiate litigation by - ANSWER - >A judge. Under the 1987 Alternative Dispute Resolution Act, only a judge can compel parties to take a dispute to mediation. Others can encourage parties to submit voluntarily to mediation prior to resorting to litigation but only a judge can compel. What is true of a mechanic's and materialman's (M&M) lien? - ANSWER
Homesteads are not protected against M&M liens, the lien is valid as of the first day work began on the property, and all owners of the property must sign before work is begun. A broker has a duty to provide what two things to his sponsoring agents? - ANSWER - >Supervision and evaluation Once a licensee has obtained a listing, he or she must: - ANSWER - provide the seller with a legible, signed, true, and correct copy of the listing agreement. Six of the members of the Broker-Lawyer Committee are selected from:
- ANSWER - >The State Bar of Texas. Responding to or facilitating inquiries about the ancestry or familial status would put the licensee in the position of violating - ANSWER -
Federal and state laws as well as the Texas Real Estate Commission
rules. Facilitating such inquiries could result in suspension or revocation of one's license.
Which type of listing agreement allows the broker to keep all proceeds from the sale that exceeds a certain amount? - ANSWER - >A net listing. Karen's application for licensing was approved on June 30, 2004. What is the latest date on which she may pass the Texas state licensing exam? - ANSWER - >12/30/ A homestead sold for delinquent taxes may be redeemed within ______ of the sale. - ANSWER - >2 years. Other properties may be redeemed within six months. Which of the Texas Real Estate Commission addenda contains the words "time is of the essence?" - ANSWER - >They are The Addendum for Sale of Other Property by Buyer, The Back-Up Addendum, and the Third-Party Financing Condition Addendum. An option clause is always interpreted under the ""time is of the essence"" rule. Texas courts will favor upholding the terms of a contract as long as there is evidence that the parties have acted in good faith and have accomplished the objectives of the agreement within reasonable time. Strict time frames will be enforced when the parties specifically agree in the contract that time is of the essence. An agency relationship cannot be created by: - ANSWER - >inherent authority What is true of listing contracts? - ANSWER - >The salesperson is not allowed to accept listings in their own names; they must be in the broker's name. The contract should show the broker as the agent and owner of the listing. However, the salesperson may sign the listing contract for the broker. Within how many days may an applicant appeal the ruling, if the commission declines an application? - ANSWER - >the licensee can
what is the best way to extend the closing date on a contract? - ANSWER - >use the Texas Real Estate Commission 39-4 "Amendment" and have the buyers and sellers sign In Texas, real estate licenses expire: - ANSWER - >on the last day of the anniversary month of issuance, A real estate salesperson may accept compensation from? - ANSWER -
The salesperson's sponsoring broker only The official effective date of a sales contract is: - ANSWER - >the date the last party signs the contract. What is required to obtain a broker's license in Texas? - ANSWER - license must be at least 18 years of age, have been actively engaged as a licensed salesperson for at least 2 years, and complete 900 hours of approved coursework For what is there NO promulgated form? - ANSWER - >contract for deed A contract contains a clause stating that "time is of the essence". This clause indicates that: - ANSWER - >any time limitations indicated in the contract must be strictly met. If Broker Bob, the listing agent, negotiates an offer that is presented by Broker Bill, who works for another company and represents a buyer, the brokers will be acting as: - ANSWER - >single agents since they both have agreements with their respective principals. What penalties may be imposed on an unlicensed individual for a single act of brokerage for which a license is required? - ANSWER - >$4, fine plus other penalties provided by law
Brokers and salespeople in Texas who are not lawyers may: - ANSWER -
Fill in the blanks on a preprinted form contract promulgated by TREC
Three members of the TREC must be: - ANSWER - >representatives of the general public who are not licensed and do not have a financial interest in the practice of a real estate office. Which of the following is true of a licensee purchasing or selling his or her own property? - ANSWER - >It is legal as long as full disclosure is made. Earnest money must be deposited in an escrow account in a "timely manner." TREC considers a "timely manner" to be: - ANSWER - >by the close of business on the second business day after the parties execute the contract. The commission will investigate complaints submitted up to how long after the alleged incident? - ANSWER - >4 years what is true of an assumed name? - ANSWER - >A broker must file an assumed name with the county clerk in the county where the broker conducts business. He or she must re-file an assumed name every 10 years, and only advertising that does not readily identify the broker as a real estate agent must contain the words "REALTOR", "real estate agent", "real estate broker", or "realty"." what is NOT listed as included in the property to be conveyed in paragraph 2 of the Texas Real Estate Commission form 20-6? - ANSWER
a self-contained spa with cover and heater Buyer Betty gives Broker Bob an earnest money deposit. According to Texas law, Broker Bob should: - ANSWER - >hold the earnest money
The commission has the authority to revoke a salesperson's license if he or she: - ANSWER - >deposits a buyer's earnest money into his or her bank account. A broker who places earnest monies in the company's operating account is guilty of what? - ANSWER - >commingling If a salesperson's license is revoked, to whom may he or she appeal the decision? - ANSWER - >The district court Who may revoke or suspend a Texas real estate license? - ANSWER -
Texas Real Estate Commission (TREC) A single act of brokerage for compensation without a license is considered: - ANSWER - >a misdemeanor. Separate property is: - ANSWER - >property owned before marriage, settlement from a personal injury suit, gifts and inheritance after marriage, and property agreed in writing to be separate what would be exempt from the seller disclosure requirements of Section 5.008 of the Texas Property Code? - ANSWER - >Property that has never been occupied, property acquired by a lender as a result of borrower default, and property being sold by a duly appointed/approved administrator or executor of an estate are specifically listed in the list of eleven exemptions When a broker decides to terminate his or her sponsorship of a salesperson, the broker must? - ANSWER - >Notify the commission in writing of the termination and return the salesperson's license to the commission
The nature of the relationship between a principal and agent can be described as: - ANSWER - >fiduciary. How many classroom hours are required to apply for a salesperson license? - ANSWER - >180 hours Real estate commissions in Texas are: - ANSWER - >always negotiable between a client and the broker. An open or non-exclusive listing agreement allows a seller to employ: - ANSWER - >an unlimited number of brokers. A claim from the recovery fund is paid only if: - ANSWER - >the licensee has no assets that can be used to satisfy a judgment. No one seems to own the vacant lot next to Henry's house, so he has used it for a garden for many years now. He may have a good chance of going to court and obtaining ownership by - ANSWER - >adverse possession. what may render a contract void? - ANSWER - >one or both of the parties to the transaction is mentally incompetent, if the contract was for an illegal purpose, or if fraud was involved. What form do brokers display in each place of business he or she maintains. - ANSWER - >Consumer Information Form 1- 1 If a tenant has not paid the rent on time, how much written notice must a landlord give the tenant to pay the rent before the landlord may file an action to evict? - ANSWER - >three days after giving written notice of rent due.
If a broker agrees to represent a buyer, but does so without a written agreement, the broker is known as a(n): - ANSWER - >volunteer agent. A number of young people have been injured in skateboarding accidents within the city park, so the city council has passed a resolution prohibiting skateboarding within public areas. The action is taken in accordance with the city's: - ANSWER - >police powers. Local governments may enact laws that protect the public health, safety, or welfare. The Residential Lead Base Paint Hazard Reduction Act allows tenants to have prospective residential lease property inspected by certified professionals if the property was constructed prior to which year? - ANSWER - > 1978 Under eminent domain, if the parties cannot agree to property value, which type of lawsuit will be filed by a city to take the property for public use? - ANSWER - >condemnation Anyone wishing to obtain a mortgage loan for the purchase of a home today who is qualified may obtain any of the following types of loans - ANSWER - >A Conventional 15-year loan, FHA insured 30-year loan, or a VA guaranteed 30-year loan (if purchaser is a veteran). If an agent fails to deposit money received from the buyer as earnest money into an escrow account in a reasonable amount of time, what may occur? - ANSWER - >Suspension or revocation of the agent's license
- To be legally entitled to a commission related to a real estate transaction, agent Richard Rock must be all of the following EXCEPT A. licensed. B. authorized to be involved in the marketing effort.
C. the procuring cause of the transaction. D. under contract to either the buyer or seller. - ANSWER - >under contract to either the buyer or seller. what is true of a broker who acts as an intermediary in a transaction? - ANSWER - >The broker may not disclose that the owner will accept a price less than the asking price. Under a (n) ____________ agreement, only the specified broker has the right to produce a buyer. The seller is even precluded from selling his or her own property. - ANSWER - >exclusive-right-to-sell listing What is true of dual agency? - ANSWER - >there is no longer a statutory provision for dual agency in the TRELA. However, common law permits a broker to represent both a buyer and a seller in the same transaction. The members of TREC are appointed by - ANSWER - >The Texas governor The agreement signed by the owners of House A and House B to share a common driveway is a form of - ANSWER - >an easement. An encumbrance that states a monetary interest in someone's property is called - ANSWER - >a lien An article of personal property that is permanently attached and becomes part of the real estate is known as - ANSWER - >a fixture. Riparian and littoral rights belong to owners of - ANSWER - >land bordering bodies of water. (Riparian rights apply to owners of land bordering rivers and streams, littoral rights to those owning land on lakes and oceans.)
what approaches would an appraiser most likely use to appraise a church? - ANSWER - >cost approach. (Unique property that does not produce income is appraised by estimating reproduction or replacement cost.) A competitive market analysis usually contains - ANSWER - >average price per square foot, closing date of sold com parables, and days on market of comparables. The applicant for a mortgage may NOT be asked about his or her - ANSWER - >national origin. The Equal Credit Opportunity Act prohibits discrimination in credit lending based on - ANSWER - >dependence on public assistance, marital status, sex, and age to those already existing of race, color, religion, and national origin as protected classes for loan applicants. Under the Truth-in-Lending Act, the cost of credit extended must be expressed as - ANSWER - >the annual percentage rate. Credit lenders may not discriminate on the basis of age unless the prospective borrowers are - ANSWER - >minors. The Webers own three pieces of real estate: their house, a lakeside cottage, and a tract of woodland. What expense may be deducted for all three properties on the Weber's income tax return? - ANSWER -
property taxes The Hansons' home was listed with a broker, but they ended up locating a buyer at Mr. Hanson's place of employment and sold the property themselves. They were still obligated, however, to pay a brokerage fee. What kind of listing had they agreed to? - ANSWER - >an exclusive right to sell
In which of the following types of agency might you see the termination of the agency relationship immediately after closing? - ANSWER -
special agency (is typically a single purpose, short term agency relationship.) If a contract ends with the sale of the property, - ANSWER - >the agency relationship of the seller and the listing broker ends at that time. what best describes the role of an agent who seeks a particular type of property for a client? - ANSWER - >special agent When a buyer is your customer, which of the following services would you NOT provide him/her? - ANSWER - >loyalty. While a buyer customer is entitled to honest business dealings, he does not get the same undivided loyalty that is owed to a buyer client When describing the particulars about a property, the agent does not disclose that a capital improvement project has been approved that will result in a special assessment to the owner in the near future. The broker has - ANSWER - >failed to provide proper disclosure as required by law. the sellers have the same obligations. The furnace at 39 State Street doesn't work properly. However, because the prospective buyers inspect the house in July, there is no indication of this. The condition of the furnace is known as - ANSWER - a latent defect. a latent defect are - ANSWER - >those that cannot be seen by a normal prudent inspection. If a material fact concerning the condition of a residential property is known by the listing broker but intentionally not disclosed to the buyer,
