Law of Agency Champions Texas Real Estate Exam Actual Exam
2026/2027 – Complete Exam-Style Questions with Detailed Rationales |
100% Verified – Pass Guaranteed A+
EXAM INFORMATION
Total Questions: 50
Recommended Time: 75 Minutes
Passing Threshold: 75%
Exam Format: Multiple Choice Questions (MCQs)
Question Style: Scenario-Based, Applied, and Legal Decision-Making Questions
Difficulty Level: Dynamically Determined Based on Exam Scope
==============================
SECTION 1: Creation and Types of Agency Relationships
Question 1: Under the Texas Real Estate License Act, which of the following is required
for a broker to legally act as an intermediary between the buyer and seller in a single
transaction?
A. Verbal consent from both parties obtained at the first showing
B. Written consent from both parties agreeing to the intermediary relationship
C. Implied consent inferred from the broker's marketing materials
D. Automatic intermediary status when both parties are represented by the same
brokerage
Correct Answer: B
Rationale: TRELA Section 1101.559 requires written consent from both parties before a
broker may act as an intermediary. The consent must state who will pay the broker and
whether the broker will appoint different license holders to communicate with each
party. Verbal consent is insufficient, and intermediary status is never automatic.
,Question 2: A property owner orally tells a licensed sales agent, "Find me a buyer for my
house and I will pay you a commission." The agent begins marketing the property. What
type of agency relationship has most likely been created?
A. Express written agency because compensation was mentioned
B. Express oral agency based on the direct authorization given
C. Implied agency arising solely from the agent's actions
D. No agency relationship because a written agreement is required for all real estate
agency in Texas
Correct Answer: B
Rationale: An express agency can be created orally or in writing. When the principal
orally authorizes the agent to act on their behalf and the agent accepts, an express oral
agency relationship is formed. While written agreements are strongly preferred and
required for certain activities, an oral agreement can still create an agency relationship
under general agency law principles in Texas.
Question 3: In Texas, a broker who represents only the seller in a transaction owes
which fiduciary duties to the seller?
A. Loyalty, confidentiality, and obedience only
B. Disclosure, accounting, and reasonable care only
C. Loyalty, confidentiality, obedience, disclosure, accounting, and reasonable care
D. Disclosure and reasonable care only, as Texas is a non-fiduciary state
Correct Answer: C
Rationale: A broker representing a seller as a single agent owes the full slate of fiduciary
duties to the seller: loyalty, confidentiality, obedience, disclosure, accounting, and
reasonable care. These duties are owed when representing a buyer as well. Texas
recognizes fiduciary duties in agency relationships despite being a disclosure state for
property conditions.
, Question 4: A buyer's agent in Texas is showing properties listed by the agent's
sponsoring broker. The buyer's agent is communicating directly with the seller, who is
also represented by the same broker. Under TRELA, what is the proper classification of
this arrangement if written intermediary consent has been obtained?
A. Dual agency, which is prohibited in Texas
B. Intermediary agency with the broker as the intermediary
C. Subagency, with the buyer's agent acting as the seller's subagent
D. Exclusive buyer agency with no relationship to the seller
Correct Answer: B
Rationale: When a broker represents both the buyer and seller in the same transaction
with proper written consent, the broker is acting as an intermediary, not a dual agent.
Texas permits intermediary relationships but prohibits dual agency. The broker may
appoint different license holders to work with each party, but the broker remains the
intermediary.
Question 5: An agency relationship created when a principal's conduct leads a third
party to reasonably believe that an agent has authority to act on the principal's behalf is
known as:
A. Express agency
B. Implied agency
C. Agency by estoppel
D. Universal agency
Correct Answer: C
Rationale: Agency by estoppel, also called ostensible agency, arises when a principal's
actions or failure to act causes a third party to reasonably believe that an agent has
authority. The principal is then estopped from denying the agency relationship. Express
2026/2027 – Complete Exam-Style Questions with Detailed Rationales |
100% Verified – Pass Guaranteed A+
EXAM INFORMATION
Total Questions: 50
Recommended Time: 75 Minutes
Passing Threshold: 75%
Exam Format: Multiple Choice Questions (MCQs)
Question Style: Scenario-Based, Applied, and Legal Decision-Making Questions
Difficulty Level: Dynamically Determined Based on Exam Scope
==============================
SECTION 1: Creation and Types of Agency Relationships
Question 1: Under the Texas Real Estate License Act, which of the following is required
for a broker to legally act as an intermediary between the buyer and seller in a single
transaction?
A. Verbal consent from both parties obtained at the first showing
B. Written consent from both parties agreeing to the intermediary relationship
C. Implied consent inferred from the broker's marketing materials
D. Automatic intermediary status when both parties are represented by the same
brokerage
Correct Answer: B
Rationale: TRELA Section 1101.559 requires written consent from both parties before a
broker may act as an intermediary. The consent must state who will pay the broker and
whether the broker will appoint different license holders to communicate with each
party. Verbal consent is insufficient, and intermediary status is never automatic.
,Question 2: A property owner orally tells a licensed sales agent, "Find me a buyer for my
house and I will pay you a commission." The agent begins marketing the property. What
type of agency relationship has most likely been created?
A. Express written agency because compensation was mentioned
B. Express oral agency based on the direct authorization given
C. Implied agency arising solely from the agent's actions
D. No agency relationship because a written agreement is required for all real estate
agency in Texas
Correct Answer: B
Rationale: An express agency can be created orally or in writing. When the principal
orally authorizes the agent to act on their behalf and the agent accepts, an express oral
agency relationship is formed. While written agreements are strongly preferred and
required for certain activities, an oral agreement can still create an agency relationship
under general agency law principles in Texas.
Question 3: In Texas, a broker who represents only the seller in a transaction owes
which fiduciary duties to the seller?
A. Loyalty, confidentiality, and obedience only
B. Disclosure, accounting, and reasonable care only
C. Loyalty, confidentiality, obedience, disclosure, accounting, and reasonable care
D. Disclosure and reasonable care only, as Texas is a non-fiduciary state
Correct Answer: C
Rationale: A broker representing a seller as a single agent owes the full slate of fiduciary
duties to the seller: loyalty, confidentiality, obedience, disclosure, accounting, and
reasonable care. These duties are owed when representing a buyer as well. Texas
recognizes fiduciary duties in agency relationships despite being a disclosure state for
property conditions.
, Question 4: A buyer's agent in Texas is showing properties listed by the agent's
sponsoring broker. The buyer's agent is communicating directly with the seller, who is
also represented by the same broker. Under TRELA, what is the proper classification of
this arrangement if written intermediary consent has been obtained?
A. Dual agency, which is prohibited in Texas
B. Intermediary agency with the broker as the intermediary
C. Subagency, with the buyer's agent acting as the seller's subagent
D. Exclusive buyer agency with no relationship to the seller
Correct Answer: B
Rationale: When a broker represents both the buyer and seller in the same transaction
with proper written consent, the broker is acting as an intermediary, not a dual agent.
Texas permits intermediary relationships but prohibits dual agency. The broker may
appoint different license holders to work with each party, but the broker remains the
intermediary.
Question 5: An agency relationship created when a principal's conduct leads a third
party to reasonably believe that an agent has authority to act on the principal's behalf is
known as:
A. Express agency
B. Implied agency
C. Agency by estoppel
D. Universal agency
Correct Answer: C
Rationale: Agency by estoppel, also called ostensible agency, arises when a principal's
actions or failure to act causes a third party to reasonably believe that an agent has
authority. The principal is then estopped from denying the agency relationship. Express
