Texas Real Estate Exam (National) Questions and Answers | Latest Version | 2025/2026 | Correct & Verified

What is the difference between rent and lease? Rent refers to payment; lease refers to the agreement. What is the income approach to value? A valuation method based on income generated by property. What is the cost approach to value? A valuation method based on replacement cost minus depreciation. What is depreciation in real estate? Loss in value due to age, wear, or obsolescence. What is functional obsolescence? Loss in value due to outdated design or features. What is economic obsolescence? Loss in value caused by external factors. What is the primary role of a real estate broker? To supervise transactions and licensed sales agents. What is the Texas Real Estate Commission responsible for? Licensing and regulating real estate professionals. What is a closing statement? A document itemizing all financial aspects of a transaction. What is escrow? Holding funds or documents by a neutral third party. What happens at closing? Ownership transfers and funds are distributed. What is recording? Filing documents in public records. What is the main purpose of recording a deed? To give public notice of ownership. What is alienation of title? Transfer of ownership rights. What is a principal in real estate? The person represented by an agent. What is the main goal of the National real estate exam? To test foundational real estate knowledge and law. What type of ownership gives the holder the greatest possible rights in real property? Fee simple absolute. What is the primary purpose of a deed in a real estate transaction? To transfer ownership of real property from one party to another. What term describes land and anything permanently attached to it? Real property. What is an easement? A legal right to use another person’s land for a specific purpose. What does a life estate allow a person to do? Use and occupy a property for the duration of their lifetime. What happens to a life estate when the life tenant dies? The property passes to the remainderman. What is the main function of a real estate appraisal? To estimate the market value of a property. What is market value? The most probable price a property would bring in a competitive and open market. What is consideration in a real estate contract? Anything of value exchanged between parties. What makes a real estate contract valid? Offer, acceptance, consideration, capacity, consent, and legality. What is earnest money? A buyer’s deposit showing good faith intent to purchase. What is an executory contract? A contract in which one or more obligations have not yet been fulfilled. What is a void contract? A contract that has no legal force or effect. What is a voidable contract? A contract that may be canceled by one of the parties. What does “agency” mean in real estate? A relationship in which one party represents another. What is fiduciary duty? The legal obligation to act in the best interest of the client. What does loyalty require from an agent? Putting the client’s interests above all others. What is confidentiality in real estate agency? Keeping client information private even after the transaction ends. What is dual agency? When one agent represents both buyer and seller in the same transaction. What is the purpose of the Information About Brokerage Services form in Texas? To explain agency relationships to consumers. What is a listing agreement? A contract between a seller and a broker authorizing the broker to market the property.