Free Texas Real Estate Practice Exam

Q1.A settlement services provider is found guilty of accepting $2,000 in unearned fees in violation of RESPA Section 8. What is the civil liability the violator faces under RESPA?

• A.$500 — the standard administrative fine assessed by HUD
• B.$2,000 — equal to the amount of the unearned fee received
• C.$4,000 — double the amount received as a deterrent penalty
• D.$6,000 — three times the amount charged for the illegal service

Q2.A homeowner receives an inheritance and decides to pay off her 30-year mortgage in full after only five years. Her loan documents include a clause imposing a fee for retiring the loan ahead of schedule. What is this fee called?

• A.Origination penalty
• B.Acceleration fee
• C.Prepayment penalty
• D.Due-on-sale charge

Q3.Under the Equal Credit Opportunity Act (ECOA), which information may a lender legally consider when evaluating a mortgage application?

• A.The applicant's marital status to determine household stability
• B.The applicant's verified employment history and income documentation
• C.The applicant's religion to assess community ties and stability
• D.The applicant's national origin to determine immigration status

Q4.A real estate sales agent in Texas makes a false statement about the condition of a property to convince a buyer to purchase it. Under Texas law, which act most directly gives the buyer a legal remedy against the agent for this misrepresentation?

• A.The Texas Real Estate License Act (TRELA)
• B.The Texas Deceptive Trade Practices–Consumer Protection Act (DTPA)
• C.The Texas Property Code Chapter 5
• D.The Texas Occupations Code Chapter 1102

Q5.What is the key difference between a mortgage pre-qualification and a mortgage pre-approval?

• A.Pre-qualification involves a hard credit pull; pre-approval uses only a soft inquiry
• B.Pre-qualification guarantees the loan amount; pre-approval is only an estimate
• C.Pre-qualification is required by Arizona law; pre-approval is optional
• D.Pre-qualification is an informal estimate based on self-reported data; pre-approval involves verified income, assets, and credit

Q6.A licensed Texas real estate sales agent who works for Broker A wants to immediately begin working for Broker B. The agent notifies Broker A verbally of the change. Under Chapter 1101 of the Texas Occupations Code and TREC Rules, when may the sales agent lawfully begin performing brokerage activities on behalf of Broker B?

• A.Immediately upon verbal notice to Broker A, because Texas law does not require written notice for a sponsorship change.
• B.Only after Broker A files a written release with TREC and TREC updates its records to reflect Broker B as the new sponsoring broker.
• C.Only after Broker B submits a sponsorship request to TREC and TREC has updated the agent's record to reflect the new sponsoring broker, regardless of whether Broker A has filed a release.
• D.After a mandatory 10-business-day waiting period following written notice to Broker A, to allow Broker A to complete any pending transactions involving the agent.

Q7.María has possessed and openly farmed a vacant lot adjacent to her property for 13 years under the belief that she owns it, based on an erroneous deed (color of title), and has paid all property taxes on the lot during that period. Under Texas law, which adverse possession statute most directly applies to her claim?

• A.The 3-year statute, requiring color of title and payment of taxes
• B.The 5-year statute, requiring a deed and cultivation
• C.The 10-year general statute, requiring open, notorious, hostile, continuous, exclusive possession
• D.The 25-year statute, protecting claims against unknown heirs

Q8.A licensee repeatedly violates TREC rules across multiple transactions. Under TRELA, what is the maximum administrative penalty TREC may impose per violation per day?

• A.$1,000
• B.$2,500
• C.$5,000
• D.$10,000

Q9.Under the Equal Credit Opportunity Act (ECOA), a lender reviewing a purchase contract may NOT consider which of the following factors when evaluating a loan application?

• A.The borrower's employment history and income stability
• B.The borrower's credit score and payment history
• C.The borrower's plans to have children within five years
• D.The borrower's debt-to-income ratio

Q10.A mother conveys ownership of her home to her son for the duration of her neighbor's lifetime. When the neighbor dies, the property reverts to the original grantor. This type of estate is called:

• A.A conventional life estate
• B.A legal life estate
• C.A fee simple defeasible
• D.A life estate pur autre vie

Q11.The FinCEN Residential Real Estate Reporting rule that took effect August 1, 2024 requires reporting of non-financed residential transactions. Which buyer type triggers the reporting obligation?

• A.A natural person purchasing in their own legal name
• B.Any buyer using a conventional mortgage
• C.An LLC purchasing all-cash residential property
• D.A U.S. citizen purchasing a second home

Q12.An effective anti-harassment policy should promise:

• A.Absolute confidentiality — no details of a complaint will ever be shared
• B.Complete transparency — all agents will be informed of complaints
• C.Confidentiality only for the alleged harasser's identity
• D.Maximum confidentiality consistent with the investigation — not absolute confidentiality

Q13.While searching title before closing, a buyer's agent discovers a lis pendens recorded against the property. What does this instrument most importantly signal to the buyer?

• A.Property taxes are delinquent and the property is subject to a tax lien sale
• B.The current owner has filed for Chapter 7 bankruptcy protection
• C.There is pending litigation that may affect ownership rights to the property
• D.The local government has condemned the property for code violations

Q14.What type of mortgage loan allows borrowers to make interest-only payments for a specified period before beginning principal and interest payments?

• A.Conventional loan
• B.Balloon mortgage
• C.Reverse mortgage
• D.Interest-only loan

Q15.Broker Chen lists a property and also represents a buyer interested in that same property. Broker Chen wishes to act as an intermediary. Which of the following conditions MUST be satisfied BEFORE Broker Chen may legally act as intermediary under Texas law?

• A.Broker Chen must obtain verbal consent from both parties at the time of the offer
• B.Broker Chen must obtain written consent from both the seller and the buyer, and each written agreement must state that the broker may act as intermediary
• C.Broker Chen need only obtain written consent from the seller, since the listing agreement controls the transaction
• D.Broker Chen must appoint two different sales agents to represent each party before obtaining any consent