RE Exam (questions with correct
answers) graded A+
Which of the following statements about the Sunset Act is TRUE? - correct answer ✔✔The Sunset Act
requires the reviews of all state agencies
Why did Texas pass the Texas Real Estate License Act (TRELA)? - correct answer ✔✔to protect the public
from brokers and sales agents who were dishonest.
Chapter 1102 of the ______ governs the practice of Texas Real Estate inspectors. - correct answer
✔✔Texas Occupations Code
Who requires sponsorship to practice real estate? - correct answer ✔✔A sales agent
What Professional Organizations DO - correct answer ✔✔provide additional education and guidance to
real estate professionals
What is the (NAR) - correct answer ✔✔The National Association of REALTORS. They are the largest
professional/trade association in the United States
The title of REALTOR can only be used by those who are members of the _______ - correct answer
✔✔(NAR) National Association of REALTORS
T/F: The role of professional organizations in the real estate industry is to regulate the industry and
ensure compliance with all state and federal laws. - correct answer ✔✔False
Which of the following is TRUE about MLS services?
A. A REALTOR must belong to at least one board in Texas.
B. The more boards an MLS member joins, the better.
C. Local associations provide MLS services only to their members.
,D. A REALTOR can only join one MLS in Texas. - correct answer ✔✔A. A REALTOR must belong to at least
one board in Texas.
The Role of Professional Organizations? - correct answer ✔✔Their role in the industry is to provide
education and guidance that benefits their members.
Which choice describes "rubber hits the road" education that meets the education requirements for
license renewal?
A. National Association of REALTORS®
B. Graduate, REALTOR® Institute
C. Council of Real Estate Brokers Managers
D. REALTORS® Land Institute - correct answer ✔✔B. Graduate, REALTOR® Institute
What is a CMA? - correct answer ✔✔"Comparative Market Analysis": a report that compares the prices
of sold homes that are similar to the subject property.
What is a BPO - correct answer ✔✔Broker's Price Opinion (BPO) is the process used by a hired sales
agent to determine the potential selling price or estimated value of a real estate property
2 Reasons why a lender would want a BPO? - correct answer ✔✔#1 people in the home have asked to
refinance the home and the lender does not want to pay for a full appraisal, but they do want to have
some assurance that the home is valued at or above what the loan will be
#2 people in the house are about to be foreclosed on and the lender wants an inexpensive estimate of
value
What is a "seller's market"? - correct answer ✔✔# of properties for sale does not meet the demand.
Pricing in favor of seller.
What is a "buyer's market" - correct answer ✔✔Fewer buyers than # of homes for sale. Pricing in favor
of buyer.
,The average number of months it will take to sell a house in a buyer's market is:
A. 6 months or more
B. 4 - 6 months
C. 0 - 4 months
D. 12 months or more - correct answer ✔✔A. 6 months or more
When an appraisal report is not available, which of the following provides the BEST data for setting a
listing price?
A. the average listing price for similar properties in the area
B. the price willing buyers have recently paid for similar properties in the area
C. the average purchase price for all properties in the immediate area
D. replacement cost of the structure plus current lot value - correct answer ✔✔B. the price willing
buyers have recently paid for similar properties in the area
T/F: A seller is more likely to want to work with an agent who uses the words "price reduction" rather
than "price adjustment." - correct answer ✔✔False
The NAR® Code of Ethics is reviewed and updated ____________.
A. every year
B. every six months
C. every two years
D. every five years - correct answer ✔✔A. every year
What is the difference between a client and a customer?
A. A customer has a legal responsibility to you or your broker and a client does not.
B. A client has a legal responsibility to you or your broker and a customer does not.
C. A client has an agency relationship with you or your broker and a customer does not.
D. A customer has an agency relationship with you or your broker and a client does not. - correct answer
✔✔C. A client has an agency relationship with you or your broker and a customer does not.
, Which of the following actions is NOT grounds for disciplinary action, including revocation or suspension
of a license?
A. Acting negligently or incompetently
B. Failing to obey a client's unlawful instruction
C. Procuring or attempting to procure a real estate license fraudulently
D. Engaging in conduct that is dishonest, or conduct that demonstrates untrustworthiness - correct
answer ✔✔B. Failing to obey a client's unlawful instruction
How can a license holder avoid misrepresentation?
A. A license holder should not disclose their negligence to the buyer in order to build trust and instill
confidence.
B. A license holder shouldn't be concerned about the source of their information.
C. A license holder should make quality educated guesses to answer questions they don't know the
answer to.
D. A license holder should point potential buyers to the resources that can help with questions that they
shouldn't answer. - correct answer ✔✔D. A license holder should point potential buyers to the resources
that can help with questions that they shouldn't answer.
Commingling happens when:
A. A license holder mixes their own money with a client's money.
B. A client mixes their own money with another client's money.
C. A license holder mixes their own money with a broker's money.
D. A client mixes their own money with a business' money. - correct answer ✔✔A. A license holder mixes
their own money with a client's money.
Which of the following acts is NOT necessarily wrong?
A. An agent sells a property using a lottery system.
B. A license holder fails to remove earned commissions from the trust account.
C. The buyer and the seller both pay the commission.
D. A broker uses a client's money for his/her own use. - correct answer ✔✔C. The buyer and the seller
both pay the commission.
answers) graded A+
Which of the following statements about the Sunset Act is TRUE? - correct answer ✔✔The Sunset Act
requires the reviews of all state agencies
Why did Texas pass the Texas Real Estate License Act (TRELA)? - correct answer ✔✔to protect the public
from brokers and sales agents who were dishonest.
Chapter 1102 of the ______ governs the practice of Texas Real Estate inspectors. - correct answer
✔✔Texas Occupations Code
Who requires sponsorship to practice real estate? - correct answer ✔✔A sales agent
What Professional Organizations DO - correct answer ✔✔provide additional education and guidance to
real estate professionals
What is the (NAR) - correct answer ✔✔The National Association of REALTORS. They are the largest
professional/trade association in the United States
The title of REALTOR can only be used by those who are members of the _______ - correct answer
✔✔(NAR) National Association of REALTORS
T/F: The role of professional organizations in the real estate industry is to regulate the industry and
ensure compliance with all state and federal laws. - correct answer ✔✔False
Which of the following is TRUE about MLS services?
A. A REALTOR must belong to at least one board in Texas.
B. The more boards an MLS member joins, the better.
C. Local associations provide MLS services only to their members.
,D. A REALTOR can only join one MLS in Texas. - correct answer ✔✔A. A REALTOR must belong to at least
one board in Texas.
The Role of Professional Organizations? - correct answer ✔✔Their role in the industry is to provide
education and guidance that benefits their members.
Which choice describes "rubber hits the road" education that meets the education requirements for
license renewal?
A. National Association of REALTORS®
B. Graduate, REALTOR® Institute
C. Council of Real Estate Brokers Managers
D. REALTORS® Land Institute - correct answer ✔✔B. Graduate, REALTOR® Institute
What is a CMA? - correct answer ✔✔"Comparative Market Analysis": a report that compares the prices
of sold homes that are similar to the subject property.
What is a BPO - correct answer ✔✔Broker's Price Opinion (BPO) is the process used by a hired sales
agent to determine the potential selling price or estimated value of a real estate property
2 Reasons why a lender would want a BPO? - correct answer ✔✔#1 people in the home have asked to
refinance the home and the lender does not want to pay for a full appraisal, but they do want to have
some assurance that the home is valued at or above what the loan will be
#2 people in the house are about to be foreclosed on and the lender wants an inexpensive estimate of
value
What is a "seller's market"? - correct answer ✔✔# of properties for sale does not meet the demand.
Pricing in favor of seller.
What is a "buyer's market" - correct answer ✔✔Fewer buyers than # of homes for sale. Pricing in favor
of buyer.
,The average number of months it will take to sell a house in a buyer's market is:
A. 6 months or more
B. 4 - 6 months
C. 0 - 4 months
D. 12 months or more - correct answer ✔✔A. 6 months or more
When an appraisal report is not available, which of the following provides the BEST data for setting a
listing price?
A. the average listing price for similar properties in the area
B. the price willing buyers have recently paid for similar properties in the area
C. the average purchase price for all properties in the immediate area
D. replacement cost of the structure plus current lot value - correct answer ✔✔B. the price willing
buyers have recently paid for similar properties in the area
T/F: A seller is more likely to want to work with an agent who uses the words "price reduction" rather
than "price adjustment." - correct answer ✔✔False
The NAR® Code of Ethics is reviewed and updated ____________.
A. every year
B. every six months
C. every two years
D. every five years - correct answer ✔✔A. every year
What is the difference between a client and a customer?
A. A customer has a legal responsibility to you or your broker and a client does not.
B. A client has a legal responsibility to you or your broker and a customer does not.
C. A client has an agency relationship with you or your broker and a customer does not.
D. A customer has an agency relationship with you or your broker and a client does not. - correct answer
✔✔C. A client has an agency relationship with you or your broker and a customer does not.
, Which of the following actions is NOT grounds for disciplinary action, including revocation or suspension
of a license?
A. Acting negligently or incompetently
B. Failing to obey a client's unlawful instruction
C. Procuring or attempting to procure a real estate license fraudulently
D. Engaging in conduct that is dishonest, or conduct that demonstrates untrustworthiness - correct
answer ✔✔B. Failing to obey a client's unlawful instruction
How can a license holder avoid misrepresentation?
A. A license holder should not disclose their negligence to the buyer in order to build trust and instill
confidence.
B. A license holder shouldn't be concerned about the source of their information.
C. A license holder should make quality educated guesses to answer questions they don't know the
answer to.
D. A license holder should point potential buyers to the resources that can help with questions that they
shouldn't answer. - correct answer ✔✔D. A license holder should point potential buyers to the resources
that can help with questions that they shouldn't answer.
Commingling happens when:
A. A license holder mixes their own money with a client's money.
B. A client mixes their own money with another client's money.
C. A license holder mixes their own money with a broker's money.
D. A client mixes their own money with a business' money. - correct answer ✔✔A. A license holder mixes
their own money with a client's money.
Which of the following acts is NOT necessarily wrong?
A. An agent sells a property using a lottery system.
B. A license holder fails to remove earned commissions from the trust account.
C. The buyer and the seller both pay the commission.
D. A broker uses a client's money for his/her own use. - correct answer ✔✔C. The buyer and the seller
both pay the commission.
