1. A broker accepts an earnest money check on Monday at 2 PM when the buyer and seller both
sign the contract. By when must the broker deposit these funds into the trust account?
A) End of business on Wednesday
B) Close of business on the 2nd business day after execution
C) Within 5 business days
D) Immediately upon receipt
The broker must deposit earnest money by the close of business on the second business day after
the contract is executed, which would be Wednesday if signed Monday.
2. A salesperson wants to advertise a new listing on social media. What information must be
clearly visible on each page of the website?
A) The salesperson’s home address
B) The sponsoring broker’s name
C) The property owner’s phone number
D) The salesperson’s license number
TREC rules require that a licensee’s website include the name of the sponsoring broker on each
page to ensure transparency and accountability.
3. A buyer receives the Seller’s Disclosure of Property Condition three days after signing the offer.
How many days does the buyer have to terminate the contract after receiving this disclosure?
A) 3 days
B) 5 days
C) 7 days
D) 10 days
If the disclosure is not provided before the buyer signs the offer, Texas law gives the buyer 7 days
after receiving it to terminate the offer.
4. A broker is acting as an intermediary in a transaction with written permission from both the
seller and buyer. What can the broker lawfully do?
A) Represent both parties as a dual agent without disclosure
B) Appoint associates to work with each party and give them advice
,C) Keep all confidential information from both sides
D) Refuse to disclose any material facts to either party
When acting as an intermediary, the broker may appoint associate licensees to work with each
party, who can then give advice and opinions to their assigned party.
5. A property owner dies without a will and has no surviving spouse or heirs. What happens to the
property?
A) It is auctioned by the county
B) It passes to the state through escheat
C) It is given to the federal government
D) It remains in probate indefinitely
Escheat is the governmental power under which the state takes ownership of property when an
individual dies without a will or any legal heirs.
6. A tenant has a lease that automatically renews each month unless either party gives notice.
What type of leasehold estate is this?
A) Estate for years
B) Periodic tenancy
C) Estate at will
D) Tenancy at sufferance
A periodic tenancy has a fixed period (like month-to-month) that automatically renews until
proper notice of termination is given by either party.
7. A lender refuses to make loans in a predominantly minority neighborhood. Which prohibited
practice is this?
A) Blockbusting
B) Steering
C) Redlining
D) Puffing
Redlining occurs when a lender refuses to do business in a specific geographic area based on the
racial or ethnic composition of that area.
8. A licensee fails to renew their license before the expiration date. What is the maximum fine
TREC can impose for this administrative violation?
A) $500
,B) $1,000
*C) $5,000*
D) $10,000
TREC administrative fines for violations range from $100 to $5,000 depending on the severity of
the violation, including late renewal.
9. A builder constructs a new home but uses inferior siding to save costs, making the home look
outdated compared to newer models. What type of depreciation is this?
A) Physical deterioration
B) Functional obsolescence
C) Economic obsolescence
D) External obsolescence
Functional obsolescence is a loss of value due to factors within the property, such as antiquated
design or inferior materials.
10. A buyer wants to back out of a contract because the property is near a newly announced
landfill. Which principle of value explains the decrease in property desirability?
A) Substitution
B) Conformity
C) Change
D) Regression
The principle of change states that property values fluctuate due to external factors, including
environmental changes like a nearby landfill.
11. A salesperson collects a commission from a buyer without going through their sponsoring
broker. What is this a violation of?
A) The Fair Housing Act
B) The requirement that commissions be paid only through the sponsoring broker
C) The Sherman Antitrust Act
D) The Truth in Lending Act
All real estate salespeople must be sponsored by a broker and receive all commissions only from
that sponsoring broker.
12. A couple purchases a home during marriage using income earned by the husband. How is this
property classified in Texas?
, A) Separate property of the husband
B) Community property
C) Homestead property only
D) Tenancy in common
In Texas, all property acquired during marriage, including property acquired with labor, is
community property jointly owned by both spouses.
13. A broker fails to deposit a client’s earnest money into the trust account and instead uses it to
pay office rent. What is this illegal act called?
A) Commingling
B) Conversion
C) Fraud
D) Misrepresentation
Conversion occurs when a broker uses a client’s money for personal purposes, which is a serious
violation of fiduciary duties.
14. A seller signs a listing agreement giving one broker the exclusive right to sell but reserves no
right to sell personally. What type of listing is this?
A) Open listing
B) Exclusive agency
C) Exclusive right to sell
D) Net listing
An exclusive right-to-sell listing means the broker receives a commission even if the seller finds the
buyer without the broker’s help.
15. An appraiser determines value by comparing a subject property to recently sold similar
properties in the same area. Which approach is being used?
A) Market or sales comparison approach
B) Income approach
C) Cost approach
D) Gross rent multiplier approach
The market or sales comparison approach estimates value by comparing the subject property to
comparable recently sold properties in the same area.
sign the contract. By when must the broker deposit these funds into the trust account?
A) End of business on Wednesday
B) Close of business on the 2nd business day after execution
C) Within 5 business days
D) Immediately upon receipt
The broker must deposit earnest money by the close of business on the second business day after
the contract is executed, which would be Wednesday if signed Monday.
2. A salesperson wants to advertise a new listing on social media. What information must be
clearly visible on each page of the website?
A) The salesperson’s home address
B) The sponsoring broker’s name
C) The property owner’s phone number
D) The salesperson’s license number
TREC rules require that a licensee’s website include the name of the sponsoring broker on each
page to ensure transparency and accountability.
3. A buyer receives the Seller’s Disclosure of Property Condition three days after signing the offer.
How many days does the buyer have to terminate the contract after receiving this disclosure?
A) 3 days
B) 5 days
C) 7 days
D) 10 days
If the disclosure is not provided before the buyer signs the offer, Texas law gives the buyer 7 days
after receiving it to terminate the offer.
4. A broker is acting as an intermediary in a transaction with written permission from both the
seller and buyer. What can the broker lawfully do?
A) Represent both parties as a dual agent without disclosure
B) Appoint associates to work with each party and give them advice
,C) Keep all confidential information from both sides
D) Refuse to disclose any material facts to either party
When acting as an intermediary, the broker may appoint associate licensees to work with each
party, who can then give advice and opinions to their assigned party.
5. A property owner dies without a will and has no surviving spouse or heirs. What happens to the
property?
A) It is auctioned by the county
B) It passes to the state through escheat
C) It is given to the federal government
D) It remains in probate indefinitely
Escheat is the governmental power under which the state takes ownership of property when an
individual dies without a will or any legal heirs.
6. A tenant has a lease that automatically renews each month unless either party gives notice.
What type of leasehold estate is this?
A) Estate for years
B) Periodic tenancy
C) Estate at will
D) Tenancy at sufferance
A periodic tenancy has a fixed period (like month-to-month) that automatically renews until
proper notice of termination is given by either party.
7. A lender refuses to make loans in a predominantly minority neighborhood. Which prohibited
practice is this?
A) Blockbusting
B) Steering
C) Redlining
D) Puffing
Redlining occurs when a lender refuses to do business in a specific geographic area based on the
racial or ethnic composition of that area.
8. A licensee fails to renew their license before the expiration date. What is the maximum fine
TREC can impose for this administrative violation?
A) $500
,B) $1,000
*C) $5,000*
D) $10,000
TREC administrative fines for violations range from $100 to $5,000 depending on the severity of
the violation, including late renewal.
9. A builder constructs a new home but uses inferior siding to save costs, making the home look
outdated compared to newer models. What type of depreciation is this?
A) Physical deterioration
B) Functional obsolescence
C) Economic obsolescence
D) External obsolescence
Functional obsolescence is a loss of value due to factors within the property, such as antiquated
design or inferior materials.
10. A buyer wants to back out of a contract because the property is near a newly announced
landfill. Which principle of value explains the decrease in property desirability?
A) Substitution
B) Conformity
C) Change
D) Regression
The principle of change states that property values fluctuate due to external factors, including
environmental changes like a nearby landfill.
11. A salesperson collects a commission from a buyer without going through their sponsoring
broker. What is this a violation of?
A) The Fair Housing Act
B) The requirement that commissions be paid only through the sponsoring broker
C) The Sherman Antitrust Act
D) The Truth in Lending Act
All real estate salespeople must be sponsored by a broker and receive all commissions only from
that sponsoring broker.
12. A couple purchases a home during marriage using income earned by the husband. How is this
property classified in Texas?
, A) Separate property of the husband
B) Community property
C) Homestead property only
D) Tenancy in common
In Texas, all property acquired during marriage, including property acquired with labor, is
community property jointly owned by both spouses.
13. A broker fails to deposit a client’s earnest money into the trust account and instead uses it to
pay office rent. What is this illegal act called?
A) Commingling
B) Conversion
C) Fraud
D) Misrepresentation
Conversion occurs when a broker uses a client’s money for personal purposes, which is a serious
violation of fiduciary duties.
14. A seller signs a listing agreement giving one broker the exclusive right to sell but reserves no
right to sell personally. What type of listing is this?
A) Open listing
B) Exclusive agency
C) Exclusive right to sell
D) Net listing
An exclusive right-to-sell listing means the broker receives a commission even if the seller finds the
buyer without the broker’s help.
15. An appraiser determines value by comparing a subject property to recently sold similar
properties in the same area. Which approach is being used?
A) Market or sales comparison approach
B) Income approach
C) Cost approach
D) Gross rent multiplier approach
The market or sales comparison approach estimates value by comparing the subject property to
comparable recently sold properties in the same area.
