1
Real Estate Practice Exam (2025/2026)
– Actual Brokerage & Disclosure
Questions with 100% Verified Legal
Answers | Graded A+
Brokerage and Agency Relationships
1. A real estate broker represents a seller under an exclusive right-to-sell listing agreement.
A buyer inquires about the property. What must the broker disclose to the buyer at the
first substantive contact?
a. The seller’s financial status
b. The broker’s agency relationship with the seller
c. The property’s appraisal value
d. The broker’s commission rate
Legal Explanation: At the first substantive contact, the broker must disclose their agency
relationship with the seller to clarify their fiduciary duties, ensuring transparency and
compliance with state laws.
2. A buyer’s agent discusses a property with a seller’s agent. When must the buyer’s agent
disclose their agency status to the seller’s agent?
a. At the closing
b. At the initial contact
c. Only if asked
d. After the offer is submitted
Legal Explanation: Agency status must be disclosed at the initial contact with another
licensee to ensure all parties understand representation roles, as required by state
regulations.
3. A broker is working with a buyer who refuses a formal agency agreement but relies
heavily on the broker’s advice. What should the broker do to address implied agency?
a. Ignore the issue
b. Ratify the relationship with a signed agency agreement
c. Terminate contact with the buyer
d. Treat the buyer as a client without documentation
Legal Explanation: Implied agency can create legal obligations. Ratifying with a signed
agreement clarifies the relationship and ensures compliance with fiduciary duties.
4. A broker represents both the buyer and seller in a transaction. What is required for this
dual agency to be legal?
a. Verbal agreement from both parties
b. Written informed consent from both parties
c. Disclosure to the seller only
d. No disclosure is needed
, 2
Legal Explanation: Dual agency requires written informed consent from both parties to
ensure transparency and avoid conflicts of interest, as mandated by state law and NAR
Code of Ethics.
5. A broker’s firm has a listing agreement with a seller. The broker wishes to represent a
buyer for the same property. What must occur?
a. The seller must terminate the listing
b. The broker must obtain consent for dual agency
c. The buyer must find another agent
d. No action is needed
Legal Explanation: Dual agency is permissible only with full disclosure and written
consent from both parties, ensuring impartiality and legal compliance.
6. A seller asks a broker to withhold information about a property’s flood history. What
should the broker do?
a. Follow the seller’s instructions
b. Disclose the flood history to potential buyers
c. Terminate the listing agreement
d. Ignore the request and proceed
Legal Explanation: Flood history is a material fact that must be disclosed to buyers, as it
affects the property’s value and safety. Withholding it violates ethical and legal
standards.
7. A broker learns of a latent defect in a listed property. What is the broker’s duty?
a. Keep the defect confidential
b. Disclose the defect to prospective buyers
c. Disclose only if the buyer asks
d. Discuss only with the seller
Legal Explanation: Latent material defects must be disclosed to buyers to ensure
informed decisions, as required by state law and NAR Code of Ethics Standard 1-9.
8. A buyer’s agent discovers a seller’s urgent need to sell. Can the agent share this with the
buyer?
a. No, it violates the seller’s confidentiality
b. Yes, it benefits the buyer
c. Yes, if the seller consents
d. No, it’s irrelevant
Legal Explanation: Sharing the seller’s motivation without consent violates
confidentiality and fiduciary duties to the seller’s agent’s client, per NAR Code of Ethics.
9. A broker is asked by a seller to misrepresent the property’s square footage. What should
the broker do?
a. Follow the seller’s request
b. Refuse and disclose accurate information
c. Ignore the request
d. Terminate the listing
Legal Explanation: Misrepresenting material facts like square footage is fraudulent and
violates state law and NAR Code of Ethics, requiring accurate disclosure.
10. A broker’s sign is placed on a property without the owner’s permission. What is the
consequence?
a. No consequence
, 3
b. License suspension or revocation
c. A fine only
d. Verbal warning
Legal Explanation: Placing a sign without permission violates TREC rules and can lead
to disciplinary action, including license suspension or revocation.
Disclosure Requirements
11. Which form must a broker provide to a buyer at the first substantive contact in Texas?
a. Listing agreement
b. Information About Brokerage Services (IABS)
c. Buyer representation agreement
d. Purchase contract
Legal Explanation: The IABS form is required by TREC to disclose agency relationships
at the first substantive contact with a potential buyer.
12. A seller discloses a roof leak to the broker but asks it not be shared. What must the broker
do?
a. Honor the seller’s request
b. Disclose the roof leak to buyers
c. Terminate the listing
d. Disclose only if asked
Legal Explanation: A roof leak is a material defect that must be disclosed to buyers, as it
impacts the property’s value and safety, per state law and NAR ethics.
13. When is a broker exempt from disclosing a property’s status regarding homicide or
suicide?
a. Never
b. Unless the buyer requests it in writing
c. Always
d. If the seller objects
Legal Explanation: In some states, nonmaterial facts like homicide or suicide do not
require disclosure unless requested in writing by the buyer.
14. A broker learns of a property’s radon gas issue. What is the broker’s duty?
a. Disclose only to the seller
b. Disclose to prospective buyers
c. Keep it confidential
d. Disclose only if asked
Legal Explanation: Radon gas is a material hazard affecting health and property value,
requiring disclosure to buyers under state and federal guidelines.
15. A buyer asks about a property’s sales history. What should the broker disclose?
a. Nothing, it’s confidential
b. The sales history
c. Only the current listing price
d. Only if the seller consents
Legal Explanation: Sales history is not confidential and must be disclosed as it may
influence the buyer’s decision, per state disclosure laws.
Real Estate Practice Exam (2025/2026)
– Actual Brokerage & Disclosure
Questions with 100% Verified Legal
Answers | Graded A+
Brokerage and Agency Relationships
1. A real estate broker represents a seller under an exclusive right-to-sell listing agreement.
A buyer inquires about the property. What must the broker disclose to the buyer at the
first substantive contact?
a. The seller’s financial status
b. The broker’s agency relationship with the seller
c. The property’s appraisal value
d. The broker’s commission rate
Legal Explanation: At the first substantive contact, the broker must disclose their agency
relationship with the seller to clarify their fiduciary duties, ensuring transparency and
compliance with state laws.
2. A buyer’s agent discusses a property with a seller’s agent. When must the buyer’s agent
disclose their agency status to the seller’s agent?
a. At the closing
b. At the initial contact
c. Only if asked
d. After the offer is submitted
Legal Explanation: Agency status must be disclosed at the initial contact with another
licensee to ensure all parties understand representation roles, as required by state
regulations.
3. A broker is working with a buyer who refuses a formal agency agreement but relies
heavily on the broker’s advice. What should the broker do to address implied agency?
a. Ignore the issue
b. Ratify the relationship with a signed agency agreement
c. Terminate contact with the buyer
d. Treat the buyer as a client without documentation
Legal Explanation: Implied agency can create legal obligations. Ratifying with a signed
agreement clarifies the relationship and ensures compliance with fiduciary duties.
4. A broker represents both the buyer and seller in a transaction. What is required for this
dual agency to be legal?
a. Verbal agreement from both parties
b. Written informed consent from both parties
c. Disclosure to the seller only
d. No disclosure is needed
, 2
Legal Explanation: Dual agency requires written informed consent from both parties to
ensure transparency and avoid conflicts of interest, as mandated by state law and NAR
Code of Ethics.
5. A broker’s firm has a listing agreement with a seller. The broker wishes to represent a
buyer for the same property. What must occur?
a. The seller must terminate the listing
b. The broker must obtain consent for dual agency
c. The buyer must find another agent
d. No action is needed
Legal Explanation: Dual agency is permissible only with full disclosure and written
consent from both parties, ensuring impartiality and legal compliance.
6. A seller asks a broker to withhold information about a property’s flood history. What
should the broker do?
a. Follow the seller’s instructions
b. Disclose the flood history to potential buyers
c. Terminate the listing agreement
d. Ignore the request and proceed
Legal Explanation: Flood history is a material fact that must be disclosed to buyers, as it
affects the property’s value and safety. Withholding it violates ethical and legal
standards.
7. A broker learns of a latent defect in a listed property. What is the broker’s duty?
a. Keep the defect confidential
b. Disclose the defect to prospective buyers
c. Disclose only if the buyer asks
d. Discuss only with the seller
Legal Explanation: Latent material defects must be disclosed to buyers to ensure
informed decisions, as required by state law and NAR Code of Ethics Standard 1-9.
8. A buyer’s agent discovers a seller’s urgent need to sell. Can the agent share this with the
buyer?
a. No, it violates the seller’s confidentiality
b. Yes, it benefits the buyer
c. Yes, if the seller consents
d. No, it’s irrelevant
Legal Explanation: Sharing the seller’s motivation without consent violates
confidentiality and fiduciary duties to the seller’s agent’s client, per NAR Code of Ethics.
9. A broker is asked by a seller to misrepresent the property’s square footage. What should
the broker do?
a. Follow the seller’s request
b. Refuse and disclose accurate information
c. Ignore the request
d. Terminate the listing
Legal Explanation: Misrepresenting material facts like square footage is fraudulent and
violates state law and NAR Code of Ethics, requiring accurate disclosure.
10. A broker’s sign is placed on a property without the owner’s permission. What is the
consequence?
a. No consequence
, 3
b. License suspension or revocation
c. A fine only
d. Verbal warning
Legal Explanation: Placing a sign without permission violates TREC rules and can lead
to disciplinary action, including license suspension or revocation.
Disclosure Requirements
11. Which form must a broker provide to a buyer at the first substantive contact in Texas?
a. Listing agreement
b. Information About Brokerage Services (IABS)
c. Buyer representation agreement
d. Purchase contract
Legal Explanation: The IABS form is required by TREC to disclose agency relationships
at the first substantive contact with a potential buyer.
12. A seller discloses a roof leak to the broker but asks it not be shared. What must the broker
do?
a. Honor the seller’s request
b. Disclose the roof leak to buyers
c. Terminate the listing
d. Disclose only if asked
Legal Explanation: A roof leak is a material defect that must be disclosed to buyers, as it
impacts the property’s value and safety, per state law and NAR ethics.
13. When is a broker exempt from disclosing a property’s status regarding homicide or
suicide?
a. Never
b. Unless the buyer requests it in writing
c. Always
d. If the seller objects
Legal Explanation: In some states, nonmaterial facts like homicide or suicide do not
require disclosure unless requested in writing by the buyer.
14. A broker learns of a property’s radon gas issue. What is the broker’s duty?
a. Disclose only to the seller
b. Disclose to prospective buyers
c. Keep it confidential
d. Disclose only if asked
Legal Explanation: Radon gas is a material hazard affecting health and property value,
requiring disclosure to buyers under state and federal guidelines.
15. A buyer asks about a property’s sales history. What should the broker disclose?
a. Nothing, it’s confidential
b. The sales history
c. Only the current listing price
d. Only if the seller consents
Legal Explanation: Sales history is not confidential and must be disclosed as it may
influence the buyer’s decision, per state disclosure laws.
