Texas Real Estate Brokerage SAE
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What type of advertising is prohibited for brokers?
✔✔False or misleading advertising
What must be included in all brokerage advertisements?
✔✔The broker’s name as licensed with TREC
Who is responsible for advertising compliance?
✔✔The broker
What must a broker do before releasing client information?
✔✔Obtain client consent unless disclosure is required by law
What is a broker’s duty of reasonable care?
✔✔Using professional skill and diligence in transactions
What document establishes broker compensation?
✔✔The listing or representation agreement
Can a broker receive compensation from more than one party?
1
,✔✔Yes, with full disclosure and consent
What is the broker’s role in contract preparation?
✔✔Filling in promulgated forms without giving legal advice
What is the primary role of a Texas real estate broker in a transaction?
✔✔To supervise licensed sales agents and ensure legal compliance
What document authorizes a broker to represent a seller?
✔✔A listing agreement
Who is ultimately responsible for the actions of sponsored sales agents?
✔✔The broker
What must a broker provide to a sales agent to establish sponsorship?
✔✔Written sponsorship agreement filed with TREC
What is the minimum age to be licensed as a broker in Texas?
✔✔18 years old
What type of trust account holds client funds such as earnest money?
✔✔Escrow (trust) account
2
,What is commingling in brokerage practice?
✔✔Mixing client funds with personal or business funds
What is conversion in real estate brokerage?
✔✔Unauthorized use of client funds
What document explains agency relationships to consumers at first contact?
✔✔Information About Brokerage Services (IABS) notice
Who must receive the IABS notice?
✔✔All prospective buyers and sellers
What brokerage activity requires written authorization from a client?
✔✔Intermediary representation
What is an intermediary broker prohibited from doing?
✔✔Advocating for one party over the other
What must brokers do to protect confidential client information?
✔✔Maintain confidentiality even after agency ends
3
, What is a designated broker?
✔✔A broker appointed to represent one party in an intermediary transaction
What is a broker’s fiduciary duty of accounting?
✔✔Safeguarding and properly recording client funds
What happens to trust funds if a transaction fails?
✔✔They are disbursed according to the contract or mutual agreement
What must a broker do if a dispute arises over earnest money?
✔✔Hold the funds until written instructions or a court order is received
What is the purpose of a written office policy manual?
✔✔To guide agents and ensure consistent compliance
Who must create and enforce office policies?
✔✔The broker
What is the broker’s duty regarding fair housing laws?
✔✔Ensure all practices comply with federal and state fair housing laws
What is steering in brokerage practice?
4
Questions and Answers | Latest
Version | 2025/2026 | Correct & Verified
What type of advertising is prohibited for brokers?
✔✔False or misleading advertising
What must be included in all brokerage advertisements?
✔✔The broker’s name as licensed with TREC
Who is responsible for advertising compliance?
✔✔The broker
What must a broker do before releasing client information?
✔✔Obtain client consent unless disclosure is required by law
What is a broker’s duty of reasonable care?
✔✔Using professional skill and diligence in transactions
What document establishes broker compensation?
✔✔The listing or representation agreement
Can a broker receive compensation from more than one party?
1
,✔✔Yes, with full disclosure and consent
What is the broker’s role in contract preparation?
✔✔Filling in promulgated forms without giving legal advice
What is the primary role of a Texas real estate broker in a transaction?
✔✔To supervise licensed sales agents and ensure legal compliance
What document authorizes a broker to represent a seller?
✔✔A listing agreement
Who is ultimately responsible for the actions of sponsored sales agents?
✔✔The broker
What must a broker provide to a sales agent to establish sponsorship?
✔✔Written sponsorship agreement filed with TREC
What is the minimum age to be licensed as a broker in Texas?
✔✔18 years old
What type of trust account holds client funds such as earnest money?
✔✔Escrow (trust) account
2
,What is commingling in brokerage practice?
✔✔Mixing client funds with personal or business funds
What is conversion in real estate brokerage?
✔✔Unauthorized use of client funds
What document explains agency relationships to consumers at first contact?
✔✔Information About Brokerage Services (IABS) notice
Who must receive the IABS notice?
✔✔All prospective buyers and sellers
What brokerage activity requires written authorization from a client?
✔✔Intermediary representation
What is an intermediary broker prohibited from doing?
✔✔Advocating for one party over the other
What must brokers do to protect confidential client information?
✔✔Maintain confidentiality even after agency ends
3
, What is a designated broker?
✔✔A broker appointed to represent one party in an intermediary transaction
What is a broker’s fiduciary duty of accounting?
✔✔Safeguarding and properly recording client funds
What happens to trust funds if a transaction fails?
✔✔They are disbursed according to the contract or mutual agreement
What must a broker do if a dispute arises over earnest money?
✔✔Hold the funds until written instructions or a court order is received
What is the purpose of a written office policy manual?
✔✔To guide agents and ensure consistent compliance
Who must create and enforce office policies?
✔✔The broker
What is the broker’s duty regarding fair housing laws?
✔✔Ensure all practices comply with federal and state fair housing laws
What is steering in brokerage practice?
4
