TEXAS REAL ESTATE EVALUATION TEST 2025/2026
QUESTIONS AND SOLUTIONS GRADED A+
✔✔Common Law Fiduciary Duties - ✔✔Obedience to instructions
Loyalty to principal
Disclosure of material information
Confidentiality of information
Accounting of money and property
Reasonable care, skill and diligence
✔✔Specific Fiduciary Duties under Commission Rules - ✔✔Duty of Fidelity
Duty of Integrity
Duty of Competency
Duty of Disclosure of Material Facts
Duty of Honesty and Avoidance of Self Dealing
Duty of Accountability of Funds
Duty of Diligence
✔✔Real Estate Recovery Trust Account - ✔✔Provides funds for TREC to reimburse
consumers who have obtained court judgments against licensees for actual damages
caused by licensees but have been unable to collect. If payment is made, the agent's
license may be revoked or suspended. Claims for exemplary damages cannot be
reimbursed. Claims against unlicensed people cannot be accepted unless they are an
employee or agent of licensees. Limited to $50,000 per transaction and $100,000 per
licensee.
✔✔Disclosure Obligations to Customers - ✔✔Concerning agency status
Concerning certain conditions affecting the property
Concerning title issues
Relevant material facts
✔✔Duties to Customers under Commission Rules - ✔✔Duty of fairness
Duty of integrity
Duty to be knowledgeable
Duty to avoid misrepresentation
Duty to disclose self dealing
✔✔Common Law Fraud - ✔✔Fraud is the misrepresentation of a material fact made
with both the knowledge of the falsity and the intent to deceive, that is justifiably relied
upon, as well as damages suffered.
Misrepresentation - must be proved to be false
Material - influences a reasonable person's decision
Knowledge - whether the person making the representation knows of th falsity of the
representation
Intent - involves whether the alleged wrongdoer intended to deceive
, Reliance - being influenced by the representation
✔✔Negligent Misrepresentation - ✔✔It is not necessary for the defendant to have
knowledge or a reckless disregard of the falsity of the representation.
✔✔Remedies Available for Common Law Liability - ✔✔Rescinding or canceling the
contract and damages.
✔✔Compensatory Damages - ✔✔Intended to compensate the innocent party for the
loss suffered at the hands of the wrongdoer. Ex: out-of-pocket expenses being awarded
to plaintiff as reimbursement.
✔✔Benefit of the Bargain Damages - ✔✔Damages that may be assessed by a judge or
jury to recover the benefit of a lost bargain in an amount that puts that person in the
same financial position that would have resulted in the contract had been fully
performed.
✔✔Exemplary Damages - ✔✔Intended to punish the defendant; as a result, these are
sometimes referred to as punitive damages and can be quite large. Texas law
specifically allows awarding of exemplary damages in common law fraud cases, many
plaintiffs choose this route. Must be proven by clear and convincing evidence.
✔✔TRELA Disciplinary Action - ✔✔Suspension - license is suspended for a period of
time.
Revocation - license has been revoked or returned to the commission, the licensee has
lost the license.
If the commission proposes to suspend or revoke, the licensee is entitled to a hearing
first.
Administrative penalty, court injunctions, state civil penalty, criminal prosecution
✔✔Limitation Periods for Common Broker Actions - ✔✔4 years - Actions for breach of
fiduciary duty and common law fraud.
2 years - Actions under state law so as to be entitled to reimbursement from the real
estate recovery account.
✔✔Seller Agency - ✔✔Refers to the agency relationship that results when an agent
represents a person who wishes to sell their property.
✔✔3 Basic Listing Agreements - ✔✔Exclusive right to sell
Exclusive agency
Open listing
✔✔Express Agreement - ✔✔An agreement or contract that has been put into words,
either written or spoken. Must be written to be enforceable.
QUESTIONS AND SOLUTIONS GRADED A+
✔✔Common Law Fiduciary Duties - ✔✔Obedience to instructions
Loyalty to principal
Disclosure of material information
Confidentiality of information
Accounting of money and property
Reasonable care, skill and diligence
✔✔Specific Fiduciary Duties under Commission Rules - ✔✔Duty of Fidelity
Duty of Integrity
Duty of Competency
Duty of Disclosure of Material Facts
Duty of Honesty and Avoidance of Self Dealing
Duty of Accountability of Funds
Duty of Diligence
✔✔Real Estate Recovery Trust Account - ✔✔Provides funds for TREC to reimburse
consumers who have obtained court judgments against licensees for actual damages
caused by licensees but have been unable to collect. If payment is made, the agent's
license may be revoked or suspended. Claims for exemplary damages cannot be
reimbursed. Claims against unlicensed people cannot be accepted unless they are an
employee or agent of licensees. Limited to $50,000 per transaction and $100,000 per
licensee.
✔✔Disclosure Obligations to Customers - ✔✔Concerning agency status
Concerning certain conditions affecting the property
Concerning title issues
Relevant material facts
✔✔Duties to Customers under Commission Rules - ✔✔Duty of fairness
Duty of integrity
Duty to be knowledgeable
Duty to avoid misrepresentation
Duty to disclose self dealing
✔✔Common Law Fraud - ✔✔Fraud is the misrepresentation of a material fact made
with both the knowledge of the falsity and the intent to deceive, that is justifiably relied
upon, as well as damages suffered.
Misrepresentation - must be proved to be false
Material - influences a reasonable person's decision
Knowledge - whether the person making the representation knows of th falsity of the
representation
Intent - involves whether the alleged wrongdoer intended to deceive
, Reliance - being influenced by the representation
✔✔Negligent Misrepresentation - ✔✔It is not necessary for the defendant to have
knowledge or a reckless disregard of the falsity of the representation.
✔✔Remedies Available for Common Law Liability - ✔✔Rescinding or canceling the
contract and damages.
✔✔Compensatory Damages - ✔✔Intended to compensate the innocent party for the
loss suffered at the hands of the wrongdoer. Ex: out-of-pocket expenses being awarded
to plaintiff as reimbursement.
✔✔Benefit of the Bargain Damages - ✔✔Damages that may be assessed by a judge or
jury to recover the benefit of a lost bargain in an amount that puts that person in the
same financial position that would have resulted in the contract had been fully
performed.
✔✔Exemplary Damages - ✔✔Intended to punish the defendant; as a result, these are
sometimes referred to as punitive damages and can be quite large. Texas law
specifically allows awarding of exemplary damages in common law fraud cases, many
plaintiffs choose this route. Must be proven by clear and convincing evidence.
✔✔TRELA Disciplinary Action - ✔✔Suspension - license is suspended for a period of
time.
Revocation - license has been revoked or returned to the commission, the licensee has
lost the license.
If the commission proposes to suspend or revoke, the licensee is entitled to a hearing
first.
Administrative penalty, court injunctions, state civil penalty, criminal prosecution
✔✔Limitation Periods for Common Broker Actions - ✔✔4 years - Actions for breach of
fiduciary duty and common law fraud.
2 years - Actions under state law so as to be entitled to reimbursement from the real
estate recovery account.
✔✔Seller Agency - ✔✔Refers to the agency relationship that results when an agent
represents a person who wishes to sell their property.
✔✔3 Basic Listing Agreements - ✔✔Exclusive right to sell
Exclusive agency
Open listing
✔✔Express Agreement - ✔✔An agreement or contract that has been put into words,
either written or spoken. Must be written to be enforceable.
