Texas Real Estate Broker Licensing Exam Test
Questions And Correct Answers (Verified Answers)
Plus Rationales 2025/2026 Q&A | Instant
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1. What is the primary duty of a real estate broker in Texas?
To represent clients’ best interests
The broker owes fiduciary duties of loyalty, honesty, and disclosure to their
clients.
2. Which agency enforces real estate license law in Texas?
Texas Real Estate Commission (TREC)
TREC is the governing body that regulates licensing, practice, and
compliance for real estate professionals.
3. How many members are on the Texas Real Estate Commission?
9 members
The commission is composed of 6 licensed brokers and 3 members of the
public, all appointed by the governor.
4. A broker must keep records of all transactions for how long?
4 years
TREC requires brokers to keep records for 4 years from the date of closing or
termination of the contract.
,5. What is commingling of funds?
Mixing client funds with personal or business funds
Brokers must keep client trust funds separate in a designated trust or
escrow account.
6. What is the maximum administrative penalty TREC may assess per
violation?
$5,000
TREC may impose up to $5,000 per violation of the Texas Occupations Code.
7. What type of ownership includes survivorship rights?
Joint tenancy
Joint tenancy provides that when one owner dies, their interest passes to
surviving owners automatically.
8. Which lien has the highest priority?
Property tax lien
Property taxes take priority over all other liens in Texas.
9. What is the minimum experience requirement to apply for a broker license
in Texas?
4 years of active sales agent experience in the past 5 years
Applicants must have this experience plus 3600 points of qualifying
transactions.
10.What is the primary purpose of the Texas Real Estate Recovery Trust
Account?
To compensate consumers for damages caused by license holders
, It protects the public if a broker or sales agent engages in fraud or
misconduct.
11.How much is the maximum payout from the Recovery Trust Account per
transaction?
$50,000
The fund will pay up to $50,000 per transaction regardless of the number of
claimants.
12.Which listing agreement provides the most protection to a broker?
Exclusive right-to-sell
This guarantees commission if the property sells, no matter who finds the
buyer.
13.A broker must deliver earnest money to the escrow agent no later than:
The close of the second business day after execution of the contract
Texas rules require prompt deposit of earnest money.
14.An unlicensed assistant may:
Prepare a flyer at the broker’s direction
Unlicensed assistants can perform clerical tasks but cannot engage in
activities requiring a license.
15.A broker acting as an intermediary must:
Obtain written consent from both parties
Intermediary relationships require informed written consent from all parties
involved.
, 16.Which approach is most often used to value income-producing property?
Income approach
This method values property based on anticipated income streams.
17.What is functional obsolescence?
Loss in value due to outdated features
This happens when property design is less desirable than newer
alternatives.
18.What type of lease includes property taxes and insurance in the rent?
Gross lease
In a gross lease, the landlord pays property expenses while the tenant pays
a fixed rent.
19.What must a broker do with trust funds?
Deposit them in a separate trust account
Trust funds must always be handled in a segregated account for client
protection.
20.Which law prohibits discrimination in housing based on race?
Civil Rights Act of 1866
This federal law applies to all housing transactions without exception.
21.Blockbusting is defined as:
Encouraging owners to sell by suggesting a protected class is moving in
This is an illegal fair housing practice designed to cause panic selling.
22.What is steering?
Directing buyers to or away from neighborhoods based on protected class
Questions And Correct Answers (Verified Answers)
Plus Rationales 2025/2026 Q&A | Instant
Download Pdf
1. What is the primary duty of a real estate broker in Texas?
To represent clients’ best interests
The broker owes fiduciary duties of loyalty, honesty, and disclosure to their
clients.
2. Which agency enforces real estate license law in Texas?
Texas Real Estate Commission (TREC)
TREC is the governing body that regulates licensing, practice, and
compliance for real estate professionals.
3. How many members are on the Texas Real Estate Commission?
9 members
The commission is composed of 6 licensed brokers and 3 members of the
public, all appointed by the governor.
4. A broker must keep records of all transactions for how long?
4 years
TREC requires brokers to keep records for 4 years from the date of closing or
termination of the contract.
,5. What is commingling of funds?
Mixing client funds with personal or business funds
Brokers must keep client trust funds separate in a designated trust or
escrow account.
6. What is the maximum administrative penalty TREC may assess per
violation?
$5,000
TREC may impose up to $5,000 per violation of the Texas Occupations Code.
7. What type of ownership includes survivorship rights?
Joint tenancy
Joint tenancy provides that when one owner dies, their interest passes to
surviving owners automatically.
8. Which lien has the highest priority?
Property tax lien
Property taxes take priority over all other liens in Texas.
9. What is the minimum experience requirement to apply for a broker license
in Texas?
4 years of active sales agent experience in the past 5 years
Applicants must have this experience plus 3600 points of qualifying
transactions.
10.What is the primary purpose of the Texas Real Estate Recovery Trust
Account?
To compensate consumers for damages caused by license holders
, It protects the public if a broker or sales agent engages in fraud or
misconduct.
11.How much is the maximum payout from the Recovery Trust Account per
transaction?
$50,000
The fund will pay up to $50,000 per transaction regardless of the number of
claimants.
12.Which listing agreement provides the most protection to a broker?
Exclusive right-to-sell
This guarantees commission if the property sells, no matter who finds the
buyer.
13.A broker must deliver earnest money to the escrow agent no later than:
The close of the second business day after execution of the contract
Texas rules require prompt deposit of earnest money.
14.An unlicensed assistant may:
Prepare a flyer at the broker’s direction
Unlicensed assistants can perform clerical tasks but cannot engage in
activities requiring a license.
15.A broker acting as an intermediary must:
Obtain written consent from both parties
Intermediary relationships require informed written consent from all parties
involved.
, 16.Which approach is most often used to value income-producing property?
Income approach
This method values property based on anticipated income streams.
17.What is functional obsolescence?
Loss in value due to outdated features
This happens when property design is less desirable than newer
alternatives.
18.What type of lease includes property taxes and insurance in the rent?
Gross lease
In a gross lease, the landlord pays property expenses while the tenant pays
a fixed rent.
19.What must a broker do with trust funds?
Deposit them in a separate trust account
Trust funds must always be handled in a segregated account for client
protection.
20.Which law prohibits discrimination in housing based on race?
Civil Rights Act of 1866
This federal law applies to all housing transactions without exception.
21.Blockbusting is defined as:
Encouraging owners to sell by suggesting a protected class is moving in
This is an illegal fair housing practice designed to cause panic selling.
22.What is steering?
Directing buyers to or away from neighborhoods based on protected class
