Free Texas Real Estate Practice Exam

Q1.According to RESPA, which of the following charges may NOT appear on a borrower's settlement statement?

• A.Kickback payment to the real estate agent
• B.Loan origination fee
• C.Title insurance premium
• D.Attorney's fee for document preparation

Q2.An offer is made on Monday. The seller sends a counteroffer on Tuesday. On Wednesday, the buyer communicates acceptance of the counteroffer. Has a binding contract been formed?

• A.No — the original offer expired when the seller sent the counteroffer; the buyer must make a new offer
• B.No — contracts require a 3-day review period under Arizona law
• C.Yes, but only if the seller signs a confirmation within 24 hours
• D.Yes — the buyer's acceptance of the counteroffer creates a binding contract

Q3.A general contractor finishes remodeling a Texas homeowner's kitchen. The homeowner refuses to pay the final draw. Under the Texas Property Code Chapter 53, what is the deadline by which the contractor must file a mechanic's lien affidavit to preserve lien rights against the homeowner's property?

• A.Within 10 days after the work is completed
• B.Within 90 days after the 15th day of the month following each month in which the work was performed, or within 90 days after the work is completed
• C.Within 15 days after receiving a notice of non-payment from the owner
• D.At any time within one year from the date the debt became due

Q4.A managing broker employs four salespersons and discovers that one of them, without authorization, has been verbally promising buyers a guaranteed rental income figure for investment properties without verifiable data. Three purchase contracts have been signed based on these representations. Under broker supervision liability principles, which scenario BEST describes the managing broker's exposure and appropriate remedial action?

• A.The broker has no liability because salespersons are independent contractors and each is solely responsible for their own misrepresentations.
• B.The broker may face vicarious liability for the salesperson's misrepresentations made within the scope of licensed activity and must immediately investigate, correct the record with affected buyers, and implement documented supervisory controls.
• C.The broker's only obligation is to terminate the salesperson; once employment ends, all liability transfers exclusively to the former salesperson.
• D.The broker is shielded from liability because the misrepresentations were oral and therefore unenforceable under the Statute of Frauds.

Q5.A property sold for $425,000. The listing agent receives 3% commission and the selling agent receives 2.5% commission. If the listing agent splits their commission 60/40 with their broker (agent keeps 60%), how much does the listing agent receive?

• A.$5,100
• B.$7,650
• C.$12,750
• D.$10,625

Q6.If a TREC disciplinary action against a Texas real estate license holder results in an adverse ruling at the administrative hearing level, the license holder may appeal that decision to which body?

• A.The Texas Real Estate Commission itself, which conducts a new de novo hearing
• B.A district court in Travis County or the county in which the license holder resides or does business
• C.The Texas Supreme Court directly, bypassing all lower courts
• D.The Texas Real Estate Broker-Lawyer Committee for final review

Q7.When must agency disclosure typically be provided to prospective clients according to general real estate practice standards?

• A.Only after a purchase agreement is signed
• B.Only when conflicts of interest arise
• C.At the first substantive contact about specific property
• D.At the closing table

Q8.After a contract is fully executed using the TREC One to Four Family Residential Contract (Resale), the buyer's agent wants to add a special provision stating that the seller must repaint the entire interior of the home in a specific color before closing. The agent drafts detailed, multi-sentence language describing the paint specifications and adds it to Paragraph 11 (Special Provisions). Under TREC rules and Texas law, this action is BEST described as:

• A.Permissible, because Paragraph 11 of the TREC promulgated contract is specifically designed to allow license holders to add any terms the parties agree upon.
• B.Permissible, because the addendum only affects personal property and cosmetic conditions, not the legal title to real property.
• C.Impermissible, because drafting detailed, multi-sentence legal obligations in Paragraph 11 goes beyond factual statements and business details, constituting the unauthorized practice of law.
• D.Permissible, but only if the buyer initials the special provision separately to confirm agreement.

Q9.A person who has never held a Texas real estate license is found to have performed multiple acts requiring a real estate license — specifically brokering the sale of another person's real estate for compensation — without first obtaining a license from TREC. Under Texas Occupations Code §1101.758 and related provisions of TRELA, which of the following penalties may apply to this unlicensed person?

• A.The person may only be required to return any compensation received; criminal penalties do not apply to unlicensed activity under Texas law.
• B.The person is subject to a civil penalty and may also face criminal prosecution, and any unlicensed person who acts as a broker or agent is additionally barred from recovering a commission for those services in a Texas court.
• C.TREC may issue a cease-and-desist order but has no authority to refer the matter for criminal prosecution.
• D.The person is subject to a fine but may still sue in Texas court to recover a commission earned during the period of unlicensed activity.

Q10.A sales agent sponsored by a Texas broker makes a negligent misrepresentation to a buyer about the square footage of a listed property. The buyer suffers financial harm as a result. Under the Texas Real Estate License Act, who bears legal and regulatory responsibility for the sales agent's conduct?

• A.Only the sales agent, because the broker was not present at the time of the misrepresentation
• B.Only TREC, because the agency insures consumers against license holder misconduct
• C.The sponsoring broker, because the broker is responsible for the conduct of sponsored sales agents
• D.The listing seller, because the seller provided the inaccurate square footage information

Q11.Under Texas Property Code § 5.008, which of the following sellers is EXEMPT from the requirement to provide a Seller's Disclosure of Property Condition to the buyer?

• A.A homeowner selling a 20-year-old single-family residence that has never been rented
• B.A trustee selling real property under a court order as part of a probate proceeding
• C.A seller who has owned the property for less than one year and has limited knowledge of its condition
• D.A seller who is relocating out of state and has not lived in the property for six months

Q12.Which federal agency is responsible for enforcing lead-based paint disclosure requirements in residential real estate transactions?

• A.Department of Housing and Urban Development (HUD)
• B.Federal Trade Commission (FTC)
• C.Consumer Financial Protection Bureau (CFPB)
• D.Environmental Protection Agency (EPA)

Q13.A seller is required to provide the Seller's Disclosure of Property Condition notice under Texas Property Code § 5.008. When must the seller deliver this notice to the buyer?

• A.Before the buyer makes an offer or as soon as practicable after an executed contract, so the buyer has a right to terminate if the notice is not timely received.
• B.At closing, as part of the settlement documents.
• C.Only after the buyer's inspection has been completed.
• D.Within 30 days after the effective date of the contract.

Q14.A broker's written buyer-representation agreement contains a clause stating that the buyer agrees the broker may also represent other buyers seeking similar properties in the same market area during the term of the agreement, and that this does not constitute a conflict of interest. The broker subsequently shows the same property to two of her buyer-clients on the same day and submits competing offers for both. Which principle of broker agency law is MOST significantly implicated, and what is the broker's BEST course of action?

• A.The clause in the buyer-representation agreement fully resolves any conflict, and the broker may proceed to negotiate both offers simultaneously without further disclosure.
• B.The broker faces a conflict of interest that the contractual clause alone cannot fully resolve once actual competing interests materialize; the broker must disclose the conflict to both buyers and consider whether to withdraw from representing one or seek additional written informed consent specific to this situation.
• C.The broker must immediately withdraw from both representations and refer both buyers to other brokers because competing offer situations are non-waivable conflicts under federal law.
• D.The broker may continue only if she submits both offers simultaneously and informs the seller's broker that competing buyers exist, because full transparency to the seller eliminates the conflict.

Q15.Which federal statute governs the HUD investigation and complaint process for fair housing violations?

• A.42 U.S.C. § 3604
• B.42 U.S.C. § 3610
• C.24 C.F.R. § 100.600
• D.A.R.S. § 41-1463