TEXAS REAL ESTATE COMPLETE 2026-2027 EXAM PAPER- REVISION
QUESTIONS & SOLUTIONS
Income Approach
The process of estimating the value of an income-producing property through capitalization of
the annual net income expected to be produced by the property during its remaining useful life.
Cost Approach
A method of estimating value based on the economic principle of substitution; the value of a
building cannot be greater than the cost of purchasing a similar site and constructing a building
of equal utility.
Competititve/Comparative Market Analysis (CMA)
Document the relevant information about the subject property (lot size, square footage,
number of rooms, features, condition, etc.)
Select comparables
Adjust the comparables
Determine a list price range for the subject property based on the adjusted comparables
broker's price opinion (BPO)
An opinion of real estate value commissioned by a bank or an attorney and provided by a
broker.
Express Contract
A contract in which the terms of the agreement are fully and explicitly stated in words, oral or
written.
Implied Contract
A contract formed in whole or in part from the conduct of the parties.
Unilateral Contract
promise in exchange for an act
Bilateral Contract
promise for a promise
Offeror
,making the offer
Offeree
A person to whom an offer is made.
Consideration
something of value exchanged for something else of value
Executed Contract
A contract that has been completely performed by both parties.
executory contract
contract not fully performed on both sides
Valid Contract
a contract which will be enforced by the court
Void Contract
an agreement of no legal effect
Rescission
termination of contract
Statute of Frauds
requires certain contracts to be in writing
contingency
a provision that makes the entire contract conditional on a specified action, usually with a date
and time deadline when the action must be completed
Agent
a representative who acts on behalf of others, becomes fiduciary
Client
represented by an agent. Also known as the principal
Customer
non-represented consumer in a transaction
, Consumer
person capable of purchasing goods or services
General Agency
authorizes the agent to make legal decisions and act for the principal in a variety of matters that
are related to a specific business. For example, a property manager is a general agent who
represents the owner in all management activities related to the property.
Universal Agent
complete authority to act on behalf of the principal. This is often created with a power of
attorney
Single Agent
represents only one party in the transaction (the seller, the buyer, the landlord, or the tenant).
Dual Agent
Buyer and seller have the same broker
Fiduciary Duties
"OLD CAR": Obedience, Loyalty, Disclosure, Confidentiality, Accountability, and Reasonable Care.
This mnemonic device has a slight variation (e.g. care vs. reasonable care), but both are helpful
in recalling the fiduciary duties an agent owes his clients and broker.
Ethical Obligation to Customers
Honesty, fair dealing and good faith, reasonable care, disclosure of known material facts
Exclusive Right to Sell Listing
A listing contract under which the owner appoints a real estate broker as his or her exclusive
agent for a designated period of time to sell the property on the owner's stated terms and
agrees to pay the broker a commission when the property is sold, whether by the broker, the
owner, or another broker.
Exclusive Agency
broker exclusive agent but owner can sell
Open Listing
Listing given to any number of brokers; only selling broker is paid
QUESTIONS & SOLUTIONS
Income Approach
The process of estimating the value of an income-producing property through capitalization of
the annual net income expected to be produced by the property during its remaining useful life.
Cost Approach
A method of estimating value based on the economic principle of substitution; the value of a
building cannot be greater than the cost of purchasing a similar site and constructing a building
of equal utility.
Competititve/Comparative Market Analysis (CMA)
Document the relevant information about the subject property (lot size, square footage,
number of rooms, features, condition, etc.)
Select comparables
Adjust the comparables
Determine a list price range for the subject property based on the adjusted comparables
broker's price opinion (BPO)
An opinion of real estate value commissioned by a bank or an attorney and provided by a
broker.
Express Contract
A contract in which the terms of the agreement are fully and explicitly stated in words, oral or
written.
Implied Contract
A contract formed in whole or in part from the conduct of the parties.
Unilateral Contract
promise in exchange for an act
Bilateral Contract
promise for a promise
Offeror
,making the offer
Offeree
A person to whom an offer is made.
Consideration
something of value exchanged for something else of value
Executed Contract
A contract that has been completely performed by both parties.
executory contract
contract not fully performed on both sides
Valid Contract
a contract which will be enforced by the court
Void Contract
an agreement of no legal effect
Rescission
termination of contract
Statute of Frauds
requires certain contracts to be in writing
contingency
a provision that makes the entire contract conditional on a specified action, usually with a date
and time deadline when the action must be completed
Agent
a representative who acts on behalf of others, becomes fiduciary
Client
represented by an agent. Also known as the principal
Customer
non-represented consumer in a transaction
, Consumer
person capable of purchasing goods or services
General Agency
authorizes the agent to make legal decisions and act for the principal in a variety of matters that
are related to a specific business. For example, a property manager is a general agent who
represents the owner in all management activities related to the property.
Universal Agent
complete authority to act on behalf of the principal. This is often created with a power of
attorney
Single Agent
represents only one party in the transaction (the seller, the buyer, the landlord, or the tenant).
Dual Agent
Buyer and seller have the same broker
Fiduciary Duties
"OLD CAR": Obedience, Loyalty, Disclosure, Confidentiality, Accountability, and Reasonable Care.
This mnemonic device has a slight variation (e.g. care vs. reasonable care), but both are helpful
in recalling the fiduciary duties an agent owes his clients and broker.
Ethical Obligation to Customers
Honesty, fair dealing and good faith, reasonable care, disclosure of known material facts
Exclusive Right to Sell Listing
A listing contract under which the owner appoints a real estate broker as his or her exclusive
agent for a designated period of time to sell the property on the owner's stated terms and
agrees to pay the broker a commission when the property is sold, whether by the broker, the
owner, or another broker.
Exclusive Agency
broker exclusive agent but owner can sell
Open Listing
Listing given to any number of brokers; only selling broker is paid
