Texas Real Estate Broker Examination
Questions And Correct Answers
(Verified Answers) Plus Rationales
2026 Q&A | Instant Download Pdf
1. What is the primary purpose of the Texas Real Estate Commission
(TREC)?
A. To establish local property tax rates
B. To protect consumers through regulation, licensing, and enforcement
C. To guarantee real estate commissions
D. To provide mortgage financing
Answer: B. To protect consumers through regulation, licensing, and
enforcement
Rationale: TREC regulates real estate license holders and related
professionals in Texas. Its regulatory role is intended primarily to
protect the public through licensing, education, standards, and
enforcement.
2. Which person generally must hold a Texas real estate broker or
sales agent license to perform acts of brokerage for another person
for compensation?
A. A property owner selling the owner's own property
B. A person performing licensed brokerage activities for another
C. A buyer purchasing a residence for personal use
D. A lender making a mortgage loan
,Answer: B. A person performing licensed brokerage activities for
another
Rationale: Texas licensing law regulates persons performing real estate
brokerage activities for others for compensation. An owner generally
may handle the owner's own property without a real estate license.
3. A Texas sales agent may perform licensed real estate activities only
when the sales agent is:
A. Sponsored by a licensed broker
B. Registered with a title company
C. Employed by a lender
D. Certified by a county appraisal district
Answer: A. Sponsored by a licensed broker
Rationale: A Texas sales agent acts through a sponsoring broker. The
broker is responsible for brokerage activities performed by sponsored
sales agents within the scope of their authorized activities.
4. Which person has primary responsibility for the brokerage
activities of sponsored sales agents?
A. The county clerk
B. The sponsoring broker
C. The title company
D. The local appraisal district
Answer: B. The sponsoring broker
Rationale: The sponsoring broker has responsibility for the brokerage
activities of sponsored sales agents. TREC rules require brokers to
establish appropriate policies, procedures, and supervision systems.
, 5. Which of the following is a fiduciary duty owed by a license
holder to a client?
A. Placing the license holder's interests above the client's
B. Maintaining loyalty to the client
C. Guaranteeing the client a profit
D. Concealing material facts from the client
Answer: B. Maintaining loyalty to the client
Rationale: Fiduciary duties include loyalty and placing the client's
interests ahead of the license holder's personal interests. A fiduciary
must also exercise reasonable care, disclose appropriate information,
and maintain confidentiality as required.
6. Which duty requires a broker to place the client's interests above
the broker's personal interests?
A. Loyalty
B. Subrogation
C. Novation
D. Acceleration
Answer: A. Loyalty
Rationale: The duty of loyalty requires an agent to act in the client's
best interest rather than placing personal interests first.
7. A broker learns that a property has a significant defect that affects
value. The broker should generally:
A. Conceal it unless asked
B. Disclose material information as required
C. Tell only the title company
D. Destroy related documents
, Answer: B. Disclose material information as required
Rationale: Material information that could affect a transaction or a
party's decision may have to be disclosed. A license holder should not
misrepresent or conceal material facts.
8. What is the primary purpose of the Information About Brokerage
Services (IABS) notice?
A. To establish the sales price
B. To explain agency and brokerage relationships
C. To calculate property taxes
D. To replace a purchase contract
Answer: B. To explain agency and brokerage relationships
Rationale: The IABS provides consumers with information about the
types of brokerage relationships and services available, along with
relevant broker and license-holder information.
9. A broker should provide the IABS information to a consumer when
required by Texas law and rules. The notice primarily helps the
consumer understand:
A. Mortgage underwriting standards
B. Brokerage relationships and minimum services
C. Property tax exemptions
D. Construction warranties
Answer: B. Brokerage relationships and minimum services
Rationale: The IABS is designed to give consumers meaningful
information about representation, brokerage relationships, and related
services before a transaction progresses.
Questions And Correct Answers
(Verified Answers) Plus Rationales
2026 Q&A | Instant Download Pdf
1. What is the primary purpose of the Texas Real Estate Commission
(TREC)?
A. To establish local property tax rates
B. To protect consumers through regulation, licensing, and enforcement
C. To guarantee real estate commissions
D. To provide mortgage financing
Answer: B. To protect consumers through regulation, licensing, and
enforcement
Rationale: TREC regulates real estate license holders and related
professionals in Texas. Its regulatory role is intended primarily to
protect the public through licensing, education, standards, and
enforcement.
2. Which person generally must hold a Texas real estate broker or
sales agent license to perform acts of brokerage for another person
for compensation?
A. A property owner selling the owner's own property
B. A person performing licensed brokerage activities for another
C. A buyer purchasing a residence for personal use
D. A lender making a mortgage loan
,Answer: B. A person performing licensed brokerage activities for
another
Rationale: Texas licensing law regulates persons performing real estate
brokerage activities for others for compensation. An owner generally
may handle the owner's own property without a real estate license.
3. A Texas sales agent may perform licensed real estate activities only
when the sales agent is:
A. Sponsored by a licensed broker
B. Registered with a title company
C. Employed by a lender
D. Certified by a county appraisal district
Answer: A. Sponsored by a licensed broker
Rationale: A Texas sales agent acts through a sponsoring broker. The
broker is responsible for brokerage activities performed by sponsored
sales agents within the scope of their authorized activities.
4. Which person has primary responsibility for the brokerage
activities of sponsored sales agents?
A. The county clerk
B. The sponsoring broker
C. The title company
D. The local appraisal district
Answer: B. The sponsoring broker
Rationale: The sponsoring broker has responsibility for the brokerage
activities of sponsored sales agents. TREC rules require brokers to
establish appropriate policies, procedures, and supervision systems.
, 5. Which of the following is a fiduciary duty owed by a license
holder to a client?
A. Placing the license holder's interests above the client's
B. Maintaining loyalty to the client
C. Guaranteeing the client a profit
D. Concealing material facts from the client
Answer: B. Maintaining loyalty to the client
Rationale: Fiduciary duties include loyalty and placing the client's
interests ahead of the license holder's personal interests. A fiduciary
must also exercise reasonable care, disclose appropriate information,
and maintain confidentiality as required.
6. Which duty requires a broker to place the client's interests above
the broker's personal interests?
A. Loyalty
B. Subrogation
C. Novation
D. Acceleration
Answer: A. Loyalty
Rationale: The duty of loyalty requires an agent to act in the client's
best interest rather than placing personal interests first.
7. A broker learns that a property has a significant defect that affects
value. The broker should generally:
A. Conceal it unless asked
B. Disclose material information as required
C. Tell only the title company
D. Destroy related documents
, Answer: B. Disclose material information as required
Rationale: Material information that could affect a transaction or a
party's decision may have to be disclosed. A license holder should not
misrepresent or conceal material facts.
8. What is the primary purpose of the Information About Brokerage
Services (IABS) notice?
A. To establish the sales price
B. To explain agency and brokerage relationships
C. To calculate property taxes
D. To replace a purchase contract
Answer: B. To explain agency and brokerage relationships
Rationale: The IABS provides consumers with information about the
types of brokerage relationships and services available, along with
relevant broker and license-holder information.
9. A broker should provide the IABS information to a consumer when
required by Texas law and rules. The notice primarily helps the
consumer understand:
A. Mortgage underwriting standards
B. Brokerage relationships and minimum services
C. Property tax exemptions
D. Construction warranties
Answer: B. Brokerage relationships and minimum services
Rationale: The IABS is designed to give consumers meaningful
information about representation, brokerage relationships, and related
services before a transaction progresses.
