Texas State Portion Real Estate Exam
Questions and Answers
1. Who is responsible for any wrongs done by a salesperson while
acting within the scope of the agency agreement?
A) The salesperson is liable.
B) The principal is liable.
C) The broker is liable for the wrongdoing of his or her
salespersons.
D) The client is liable.
Correct Answer C) The broker is liable for the wrongdoing of his or her
salespersons.
Explanation: Under Texas law, the broker is responsible for the acts of
salespersons acting within the scope of their agency.
2. What is the distinction between sales contracts and option
contracts?
A) Mutual obligation exists in sales contracts but not in option
contracts.
B) Both lack mutual obligation.
C) One characteristic of sales contracts is mutual obligation;
option contracts lack mutual obligation, and the buyer in an
option contract is not obligated to buy.
, D) Option contracts obligate the buyer to purchase, while sales
contracts do not.
Correct Answer C) One characteristic of sales contracts is mutual
obligation; option contracts lack mutual obligation, and the buyer in an
option contract is not obligated to buy.
Explanation: Sales contracts involve mutual obligation—both parties
are bound. Option contracts give the buyer the right, but not the
obligation, to purchase.
3. A listing agreement must contain:
A) A standard street address is sufficient.
B) A detailed property description.
C) A legal description of the property.
D) The seller's social security number.
Correct Answer A) A standard street address is sufficient.
Explanation: While a detailed legal description is ideal, a standard
street address is acceptable in a listing agreement.
4. 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 within how many days after the
commission reaches its decision?
A) 10 days
, B) 20 days
C) 30 days
D) 60 days
Correct Answer C) 30 days
Explanation: The licensee has the right to a hearing within 30 days of
the commission's decision to suspend or revoke.
5. Which of the licensed entities does not fall under the regulatory
authority of the Texas Real Estate Commission?
A) Real estate brokers and salespersons
B) Real estate inspectors
C) Residential service companies ("home warranties")
D) The Texas Appraiser Licensing and Certification Board
Correct Answer D) The Texas Appraiser Licensing and Certification
Board
Explanation: The Texas Appraiser Licensing and Certification Board
regulates appraisers, not TREC.
6. A licensee in Texas may not practice law unless licensed and
authorized to do so. Practicing law includes altering contracts, or
drawing up:
A) Lease agreements.
, B) Deeds, deeds of trust, wills, or other instruments affecting land
titles.
C) Promissory notes.
D) Property management agreements.
Correct Answer B) Deeds, deeds of trust, wills, or other instruments
affecting land titles.
Explanation: Only licensed attorneys can legally draft or alter legal
documents affecting land titles.
7. What penalties may a licensee who breaches the agency
relationship face?
A) A fine only.
B) A license suspension only.
C) Damages, contract termination, and/or non-payment of
commission.
D) Imprisonment.
Correct Answer C) Damages, contract termination, and/or non-payment
of commission.
Explanation: Breaching agency duties can lead to lawsuits, contract
termination, or loss of commission.
8. Undisclosed dual agency is:
Questions and Answers
1. Who is responsible for any wrongs done by a salesperson while
acting within the scope of the agency agreement?
A) The salesperson is liable.
B) The principal is liable.
C) The broker is liable for the wrongdoing of his or her
salespersons.
D) The client is liable.
Correct Answer C) The broker is liable for the wrongdoing of his or her
salespersons.
Explanation: Under Texas law, the broker is responsible for the acts of
salespersons acting within the scope of their agency.
2. What is the distinction between sales contracts and option
contracts?
A) Mutual obligation exists in sales contracts but not in option
contracts.
B) Both lack mutual obligation.
C) One characteristic of sales contracts is mutual obligation;
option contracts lack mutual obligation, and the buyer in an
option contract is not obligated to buy.
, D) Option contracts obligate the buyer to purchase, while sales
contracts do not.
Correct Answer C) One characteristic of sales contracts is mutual
obligation; option contracts lack mutual obligation, and the buyer in an
option contract is not obligated to buy.
Explanation: Sales contracts involve mutual obligation—both parties
are bound. Option contracts give the buyer the right, but not the
obligation, to purchase.
3. A listing agreement must contain:
A) A standard street address is sufficient.
B) A detailed property description.
C) A legal description of the property.
D) The seller's social security number.
Correct Answer A) A standard street address is sufficient.
Explanation: While a detailed legal description is ideal, a standard
street address is acceptable in a listing agreement.
4. 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 within how many days after the
commission reaches its decision?
A) 10 days
, B) 20 days
C) 30 days
D) 60 days
Correct Answer C) 30 days
Explanation: The licensee has the right to a hearing within 30 days of
the commission's decision to suspend or revoke.
5. Which of the licensed entities does not fall under the regulatory
authority of the Texas Real Estate Commission?
A) Real estate brokers and salespersons
B) Real estate inspectors
C) Residential service companies ("home warranties")
D) The Texas Appraiser Licensing and Certification Board
Correct Answer D) The Texas Appraiser Licensing and Certification
Board
Explanation: The Texas Appraiser Licensing and Certification Board
regulates appraisers, not TREC.
6. A licensee in Texas may not practice law unless licensed and
authorized to do so. Practicing law includes altering contracts, or
drawing up:
A) Lease agreements.
, B) Deeds, deeds of trust, wills, or other instruments affecting land
titles.
C) Promissory notes.
D) Property management agreements.
Correct Answer B) Deeds, deeds of trust, wills, or other instruments
affecting land titles.
Explanation: Only licensed attorneys can legally draft or alter legal
documents affecting land titles.
7. What penalties may a licensee who breaches the agency
relationship face?
A) A fine only.
B) A license suspension only.
C) Damages, contract termination, and/or non-payment of
commission.
D) Imprisonment.
Correct Answer C) Damages, contract termination, and/or non-payment
of commission.
Explanation: Breaching agency duties can lead to lawsuits, contract
termination, or loss of commission.
8. Undisclosed dual agency is:
