Texas Real Estate Exam (State) Questions and Answers Latest 2024/2025 with complete solutions

Seller's Disclosure of Property Condition - must be given to a buyer before he signs an offer to make that offer binding on the buyer -if the buyer does not have the disclosure before signing, he has 7 days to terminate his offer, after receiving the disclosure -disclosure required in most states, but not all (required in Texas) Texas Real Estate License Act (TRELA) - -passed by legislation to protect the public against unscrupulous brokers and salesmen -rules and regulations are construed liberally with a view toward their purpose, and have the full force and effect of the law Broker Lawyer Committee - -writes promulgated contract forms -13 members (6 are brokers appointed by TREC, 6 are lawyers appointed by the President of the State Bar Association, 1 is a public member appointed by the governor) Real Estate Recovery Fund - created by TREC to pay aggrieved persons who suffered a monetary loss due to unscrupulous acts of the licensees -persons can receive up to 3 times the amount of money lost -when an amount is paid out of it, the license of the individual is automatically revoked or suspended without a hearing (cannot be recovered until the fund has been repaid with interest) persons who must have a real estate license - neys who participate in a commission split oneers involved in a real estate transaction ment locators estate salespeople designated officer of a licensed real estate corporation or the designated manager of a licensed Real Estate Limited Liability Company (the designated one is a broker) 1-4 MUST BE SPONSORED BY A BROKER AND RECEIVE COMMISSIONS ONLY FROM THAT BROKERsteps in obtaining a real estate license - 1. meet the educational requirements 2. submit an application with or without a sponsoring broker 3. submit the required fees 4. pass the state exam 5. demonstrate integrity licensing requirements - -18 years of age -resident of Texas at the time of application -comply with legal residency requirements (not an illegal alien) educational requirements - 180 classroom hours with a minimum of 120 in core real estate courses -60 hours in Principles of Real Estate, 30 hours in Law of Contracts, 30 hours in the Law of Agency are mandatory TREC Consumer information form 1-1 - -notifies the public of the recovery fund -applies to both real estate licensees and inspectors -must be displayed in the broker's office -must be included in listing and buyer representation agreements, as well as any invoices for services foreign broker - a broker from another state -must work through resident brokers -may collect commission from a Texas broker, as long as that broker does not negotiate in Texas advertising rules - -broker name must be on each page of the web site -licensee's web site must include the name of sponsoring broker -when advertising listed property, broker or company name must be in the adSenate Bill 489 - allows the broker to act as an intermediary in a transaction where he represents both the seller and the buyer and has the written permission of both parties including how the broker will be paid -only a broker can act as an intermediary -appropriate for the broker to appoint associates to work with the parties in the transaction (may give advice and opinions to one party) -requires a licensee to give Information About Brokerage Services (IABS) to a prospect at the first substantive dialogue substantive dialogue - a face-to-face meeting where substantive dialogue of real estate takes place or any mailing with a substantial amount of information about a particular property Texas Real Estate Commission (TREC) - -created in 1949 -purpose: to administer the provisions of the License Act -authority to make rules and regulations -9 members (3 represent the general public, 6 are real estate brokers) -all appointed by the governor and approved by the Senate -serve 6 year terms -has the power to subpoena books, records, and witnesses -has the power to issue or revoke Real Estate Licenses subagent - a licensee who represents the seller while being sponsored by a broker other than the listing broker -working with a buyer customer rather than a buyer client new listing - a licensee has 5 days to enter a new listing into the MLS contracts - -must use standard contract forms when available -TREC has promulgated sales contract forms for most residential properties (no forms for commercial transactions) -MUST use a TREC promulgated form unless another contract form has been prepared and is REQUIRED by the owner of the property-Broker Lawyer Committee writes forms, TREC promulgates them Seller's Temporary Lease Addendum TREC 15-3 and Buyer's Temporary Lease Addendum TREC 16-3 - used when the lease period is 90 days or less backup offers - -all must be presented to the seller, order does not matter -to become effective the previous contract must be terminated and the backup buyer must pay any option fee, name any option period, and deposit any earnest money with an escrow agent -option fee must be paid independently of any other consideration party accepting the final change - the last party to sign a contract -broker is responsible for filling in the effective date - individual has four years from the effective date of a contract to file a complaint with TREC regarding the licensee involved (must be written and signed) contingency clause - a clause in a contract requiring a condition to be met earnest money deposit - if a broker accepts an earnest money deposit, and acts as an escrow agent, the money must be deposited in a trust account by the close of business of the 2nd business day after the execution of the contract -broker must keep records of this account for 4 years Statute of Frauds - requires that all contracts that relate to the transfer of any interest in real estate must be in writing to be enforceable -also applies to compensation agreements, such as listings and buyer representation agreements RE inspectors - must use promulgated forms for residential inspections mediation - a mediator hears both sides of a dispute and tries to help the parties come to an agreementarbitration - an arbitrator hears both sides of a dispute and tells the parties what to do homestead - parcels of real estate owned and occupied by families (one per person or family) -a statutory estate in Texas -protected from forced sale by all creditors except: mortgage, property taxes, mechanics and materialmen's liens, and homeowner associations -designated to protect the interests of homeowners -if foreclosed on for unpaid property taxes, the owner has 2 years to redeem the property (6 months for unpaid HOA fees) -max size: urban 10 acres, rural 200 acres -derive from the Texas Constitution