TEXAS REAL ESTATE SALES AGENT LICENSING
LEVEL IV EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2026 Q&A | INSTANT
DOWNLOAD
1. What is the primary purpose of the Texas Real Estate Commission
(TREC)?
A. To set property prices
B. To regulate real estate licensing and enforce laws
C. To sell real estate on behalf of the state
D. To provide mortgage loans
Answer: B
Rationale: TREC regulates real estate licensing, establishes rules for
practice, and enforces the Texas Real Estate License Act.
2. Which of the following best defines a real estate broker?
A. Someone who appraises real estate
B. A person licensed to perform real estate transactions for others for
compensation
C. A mortgage lender
D. A property inspector
Answer: B
Rationale: A broker is licensed to perform real estate services for others
and receives compensation for those services.
,3. In Texas, a sales agent must work under the supervision of:
A. The TREC executive director
B. Another sales agent
C. A licensed real estate broker
D. The property owner
Answer: C
Rationale: Sales agents must be sponsored by a licensed broker who
oversees their real estate activities.
4. Which type of listing agreement provides the most protection for
the broker?
A. Open listing
B. Exclusive agency listing
C. Exclusive right-to-sell listing
D. Net listing
Answer: C
Rationale: An exclusive right-to-sell listing guarantees the broker
receives a commission regardless of who sells the property.
5. A buyer gives a broker a check as earnest money. The broker must:
A. Deposit it in their personal account
B. Deposit it into a trust or escrow account immediately
C. Give it to the seller directly
D. Wait until closing to deposit
,Answer: B
Rationale: Texas law requires earnest money to be deposited promptly
into a trust or escrow account to protect the buyer.
6. What is the statutory period for a broker to deposit earnest money
after the contract is executed?
A. 24 hours
B. 48 hours
C. 3 business days
D. 5 business days
Answer: C
Rationale: Texas law requires brokers to deposit funds into a trust
account within 3 business days after contract execution.
7. A real estate agent owes fiduciary duties to:
A. All parties involved in the transaction
B. Their client only
C. The buyer only
D. The seller only
Answer: B
Rationale: Agents owe fiduciary duties such as loyalty, disclosure, and
confidentiality to their clients, not to all parties.
8. Which of the following is NOT a fiduciary duty?
A. Loyalty
B. Obedience
, C. Confidentiality
D. Advertising
Answer: D
Rationale: Advertising is a marketing activity, not a fiduciary
responsibility.
9. In Texas, a real estate agent can legally act as a dual agent if:
A. They represent both parties without disclosure
B. Both parties provide written consent
C. They only show the property
D. They are also the mortgage lender
Answer: B
Rationale: Dual agency is legal only if both the buyer and seller give
written consent acknowledging the agent’s dual representation.
10. A property disclosure statement in Texas must be provided by:
A. The buyer
B. The listing agent
C. The seller
D. The mortgage company
Answer: C
Rationale: The seller is legally required to disclose known material
defects in the property through the Texas Seller’s Disclosure Notice.
11. Which type of contract is most commonly used for Texas real
estate sales?
A. Oral contract
LEVEL IV EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2026 Q&A | INSTANT
DOWNLOAD
1. What is the primary purpose of the Texas Real Estate Commission
(TREC)?
A. To set property prices
B. To regulate real estate licensing and enforce laws
C. To sell real estate on behalf of the state
D. To provide mortgage loans
Answer: B
Rationale: TREC regulates real estate licensing, establishes rules for
practice, and enforces the Texas Real Estate License Act.
2. Which of the following best defines a real estate broker?
A. Someone who appraises real estate
B. A person licensed to perform real estate transactions for others for
compensation
C. A mortgage lender
D. A property inspector
Answer: B
Rationale: A broker is licensed to perform real estate services for others
and receives compensation for those services.
,3. In Texas, a sales agent must work under the supervision of:
A. The TREC executive director
B. Another sales agent
C. A licensed real estate broker
D. The property owner
Answer: C
Rationale: Sales agents must be sponsored by a licensed broker who
oversees their real estate activities.
4. Which type of listing agreement provides the most protection for
the broker?
A. Open listing
B. Exclusive agency listing
C. Exclusive right-to-sell listing
D. Net listing
Answer: C
Rationale: An exclusive right-to-sell listing guarantees the broker
receives a commission regardless of who sells the property.
5. A buyer gives a broker a check as earnest money. The broker must:
A. Deposit it in their personal account
B. Deposit it into a trust or escrow account immediately
C. Give it to the seller directly
D. Wait until closing to deposit
,Answer: B
Rationale: Texas law requires earnest money to be deposited promptly
into a trust or escrow account to protect the buyer.
6. What is the statutory period for a broker to deposit earnest money
after the contract is executed?
A. 24 hours
B. 48 hours
C. 3 business days
D. 5 business days
Answer: C
Rationale: Texas law requires brokers to deposit funds into a trust
account within 3 business days after contract execution.
7. A real estate agent owes fiduciary duties to:
A. All parties involved in the transaction
B. Their client only
C. The buyer only
D. The seller only
Answer: B
Rationale: Agents owe fiduciary duties such as loyalty, disclosure, and
confidentiality to their clients, not to all parties.
8. Which of the following is NOT a fiduciary duty?
A. Loyalty
B. Obedience
, C. Confidentiality
D. Advertising
Answer: D
Rationale: Advertising is a marketing activity, not a fiduciary
responsibility.
9. In Texas, a real estate agent can legally act as a dual agent if:
A. They represent both parties without disclosure
B. Both parties provide written consent
C. They only show the property
D. They are also the mortgage lender
Answer: B
Rationale: Dual agency is legal only if both the buyer and seller give
written consent acknowledging the agent’s dual representation.
10. A property disclosure statement in Texas must be provided by:
A. The buyer
B. The listing agent
C. The seller
D. The mortgage company
Answer: C
Rationale: The seller is legally required to disclose known material
defects in the property through the Texas Seller’s Disclosure Notice.
11. Which type of contract is most commonly used for Texas real
estate sales?
A. Oral contract
