TheoryTexas Real Estate 26
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30 free Texas Real Estate 26 questions
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Agency & Disclosures
In Texas, the term 'client' refers to the party who has what type of relationship with a real estate broker?
Correct — A. A client in Texas real estate is a principal — a seller, buyer, landlord, or tenant — who has entered into a written representation agreement with the broker, creating fiduciary-level duties. -
Agency & Disclosures
Under TRELA, who bears ultimate responsibility for the acts and omissions of sponsored sales agents?
Correct — C. Under the Texas Real Estate License Act (TRELA), the sponsoring broker is legally responsible for all professional acts performed by their sponsored agents. -
Agency & Disclosures
Which of the following duties is owed to a CLIENT but NOT to a mere customer under Texas law?
Correct — B. Loyalty is a fiduciary duty owed exclusively to a client. Honesty and disclosure of material defects are owed to everyone, including customers, regardless of representation status. -
Agency & Disclosures
When a broker represents both the buyer and seller in the same transaction with both parties' written consent, this is called:
Correct — C. Texas uses the term 'intermediary' for a broker who, with written consent of both parties, represents both buyer and seller in the same transaction. -
Agency & Disclosures
An agent who works with a buyer without any written representation agreement owes the buyer which of the following duties?
Correct — D. Without a representation agreement, the buyer is a customer, not a client. The agent still owes honesty and must disclose known material facts, but owes no fiduciary duties such as loyalty or confidentiality. -
Agency & Disclosures
A Texas broker has a signed listing agreement with Seller A and a buyer representation agreement with Buyer B. Both A and B want the broker to handle the same property. To legally proceed as an intermediary, what is the FIRST required step?
Correct — A. Before acting as an intermediary, the broker must obtain written consent from BOTH clients. Only after that consent is secured can the broker optionally appoint designated agents. -
Agency & Disclosures
What is the full name of the TREC form that a Texas licensee must give to a consumer at first substantive contact?
Correct — C. The Information About Brokerage Services (IABS) notice, promulgated by TREC, must be provided to all consumers at or before the first substantive communication about specific real property. -
Agency & Disclosures
A licensee posts their IABS notice conspicuously on their website. When is this SUFFICIENT to satisfy the IABS delivery requirement?
Correct — A. TREC rules allow website posting as an acceptable delivery method when the first substantive communication takes place via that website. For in-person or phone contacts, the form must still be physically or electronically delivered. -
Agency & Disclosures
Which of the following must be included on the face of the IABS form?
Correct — B. The IABS form must display the broker's name, license number, and business contact information so consumers can verify the licensee's credentials with TREC. -
Agency & Disclosures
A Texas licensee working solely as a buyer's agent shows a property listed by another broker. Which statement about IABS delivery is correct?
Correct — C. Every licensee must provide the IABS at first substantive contact, regardless of which side they represent. There is no exemption for buyer's agents or existing clients. -
Agency & Disclosures
Under an exclusive-right-to-sell listing, the broker earns a commission if the property sells:
Correct — D. An exclusive-right-to-sell listing entitles the broker to a commission no matter who produces the ready, willing, and able buyer — even if the owner finds the buyer independently. -
Agency & Disclosures
A listing agreement in Texas must contain which of the following to be enforceable?
Correct — B. TREC rules require that every listing agreement include a specific, definite termination date; open-ended listings are prohibited to protect sellers from being perpetually bound. -
Agency & Disclosures
Which listing type allows the seller to list with multiple brokers simultaneously, with a commission owed only to the broker who procures the buyer?
Correct — C. An open listing is a non-exclusive arrangement where the seller may list with multiple brokers; only the broker who actually produces the ready, willing, and able buyer earns the commission. -
Agency & Disclosures
A Texas listing agreement includes a 'protection period' clause. What does this clause protect the broker against?
Correct — D. A protection (safety/carryover) clause extends the broker's right to a commission for a specified period after expiration if the property is sold to a prospect the broker introduced during the listing term. -
Agency & Disclosures
Under Texas law, a net listing is:
Correct — A. Net listings are legal in Texas but strongly discouraged by TREC because they create a conflict of interest — the broker profits more from a higher price. TREC rules require full disclosure of the broker's potential gain. -
Agency & Disclosures
A Buyer Representation Agreement (BRA) in Texas is primarily a contract between:
Correct — B. A BRA is a contract between the buyer and the BROKER (not the individual sales agent), establishing the broker as the buyer's agent and specifying compensation terms. -
Agency & Disclosures
Which of the following best describes what a buyer's agent is obligated to do for a client under a buyer representation agreement?
Correct — C. A buyer's agent owes the buyer fiduciary duties including loyalty, confidentiality, disclosure, obedience, reasonable care, and accounting — the core of which is representing the buyer's best interests. -
Agency & Disclosures
When must a Texas buyer representation agreement be in writing to be enforceable?
Correct — D. Under TRELA and the Statute of Frauds, agreements between a buyer and broker for compensation must be in writing to be enforceable in Texas. -
Agency & Disclosures
A buyer's agent discovers the property her client is about to purchase has undisclosed foundation issues visible from the attic. What must the agent do?
Correct — A. A buyer's agent owes the client a duty of disclosure, including known material defects. The agent must inform the buyer even if it jeopardizes the transaction. -
Agency & Disclosures
A buyer's agent is working under an exclusive buyer representation agreement with a definite expiration date. The buyer finds a property on their own and closes after the agreement expires but within the protection period. Is the broker owed compensation?
Correct — B. If the buyer representation agreement contains a protection clause and the buyer closes on a property introduced by the broker during the term, the broker is owed compensation even after expiration. -
Agency & Disclosures
In Texas, which term is used for a broker who is authorized in writing to act as an agent for BOTH buyer and seller in the same transaction?
Correct — C. Texas law does not use 'dual agent' or 'transaction broker' — the statutory term is 'intermediary.' This status requires written consent from both principals. -
Agency & Disclosures
When a broker acts as an intermediary and appoints two different associates to work with each party, the appointed associates may:
Correct — D. Designated (appointed) associates under an intermediary arrangement may give advice, opinions, and recommendations to their respective party — functioning much like a single-party agent for the person they are appointed to serve. -
Agency & Disclosures
Which of the following pieces of information is an intermediary broker PROHIBITED from revealing to either party?
Correct — A. An intermediary cannot disclose a party's minimum/maximum acceptable price unless that party gives explicit written authorization. Material defects, by contrast, must be disclosed to all parties. -
Agency & Disclosures
A broker has written intermediary consent from both parties. There are no associates available to appoint. Which statement is TRUE?
Correct — B. When a broker acts as an intermediary without appointed associates, the broker may not give opinions, advice, or recommendations to either party. Only after appointing separate associates can advocacy occur. -
Agency & Disclosures
Broker Maria represents Seller via a listing agreement and also has a buyer representation agreement with Buyer. Both parties consent in writing to intermediary status. Maria appoints Agent X for Seller and Agent Y for Buyer. Which statement is CORRECT?
Correct — C. Appointed associates serve their respective party with full advocacy while maintaining confidentiality. Maria as intermediary broker steps back from advocacy but retains supervisory responsibility. -
Agency & Disclosures
The Texas Seller's Disclosure Notice is required by which Texas law?
Correct — D. Texas Property Code §5.008 requires sellers of certain residential properties to complete and deliver a Seller's Disclosure Notice to prospective buyers. -
Agency & Disclosures
Which type of residential property is EXEMPT from the Texas Seller's Disclosure Notice requirement?
Correct — A. Transfers by court order — including foreclosure sales, sales by a trustee in bankruptcy, or probate transfers — are among the exemptions listed in Texas Property Code §5.008. -
Agency & Disclosures
A seller fails to deliver the Seller's Disclosure Notice before signing the contract. What right does the buyer have under Texas Property Code §5.008?
Correct — B. If the Seller's Disclosure Notice is provided after the contract is executed, the buyer has a 7-day right to terminate and receive earnest money back. -
Agency & Disclosures
A Texas licensee learns that a listing property was the site of a murder two years ago. There is no physical defect. Is the agent required to disclose this?
Correct — C. Texas Property Code §5.008 and TREC rules do not require disclosure of psychological stigmas such as prior deaths, crimes, or alleged hauntings; only physical material defects that affect property condition must be disclosed. -
Agency & Disclosures
A listing agent discovers the seller completed a foundation repair without a permit. The seller asks the agent to stay silent. What is the agent's correct course of action?
Correct — D. An unpermitted repair affecting structural integrity is a known material defect. A licensee's duty of honesty and disclosure to all parties overrides a client's request for silence on material facts.
Texas Real Estate 26 sample questions
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Agency & Disclosures Under TREC rules, which of the following is considered a 'material fact' that a licensee must disclose?
A. A fact that would likely affect a reasonable person's decision to buy, sell, or lease the property ✓
B. Any negative information about the property regardless of its impact on value
C. Only defects visible during a standard walkthrough
D. Defects that cost more than $500 to repair
Correct — A. A material fact is one that would influence the decision of a reasonable person in the transaction — whether to enter the contract, at what price, or under what terms. Licensees must disclose known material facts to all parties.
Contracts Which agency promulgates the standard contract forms that Texas real estate license holders must use for most residential resale transactions?
A. The Texas Real Estate Commission (TREC) ✓
B. The Texas Association of Realtors
C. The Texas Department of Insurance
D. The local county clerk
Correct — A. TREC promulgates contract forms; license holders are generally required to use these mandatory forms in transactions for which they are intended.
Financing A conventional loan is BEST described as a mortgage that is:
A. Insured by the Federal Housing Administration
B. Guaranteed by the Department of Veterans Affairs
C. Backed by the Rural Housing Service
D. Not insured or guaranteed by the federal government ✓
Correct — D. A conventional loan is any mortgage not insured or guaranteed by a federal agency. FHA, VA, and USDA loans are government-backed programs, distinguishing them from conventional products.
Real Estate Math A home sells for $280,000. The broker charges a 6% commission. What is the total commission?
A. $1,680
B. $28,000
C. $16,800 ✓
D. $18,600
Correct — C. Commission = Sale Price × Rate = $280,000 × 0.06 = $16,800.
Property Ownership A grantor conveys land 'to the City of Dallas so long as it is used for a public park.' The city's estate is best described as:
A. Fee simple absolute
B. Fee simple determinable ✓
C. Fee simple subject to a condition subsequent
D. Life estate
Correct — B. The words 'so long as' create a fee simple determinable, which automatically reverts to the grantor (via the possibility of reverter) when the specified use ceases.
Real Estate Practice In Texas, an agent who represents only the buyer in a transaction is called a(n):
A. Buyer's agent ✓
B. Listing agent
C. Dual agent
D. Transaction broker
Correct — A. A buyer's agent represents solely the buyer's interests. The listing agent represents the seller, while dual agency involves representing both parties simultaneously.
Texas TREC Law & Rules How many members serve on the Texas Real Estate Commission (TREC)?
A. Nine members ✓
B. Seven members
C. Eleven members
D. Five members
Correct — A. TREC is composed of nine members appointed by the governor: six licensed brokers and three public members who represent consumer interests.
Valuation & Appraisal The primary purpose of a real estate appraisal is to:
A. Determine the listing price for a property
B. Negotiate a final sale price between buyer and seller
C. Provide an unbiased estimate of market value ✓
D. Calculate the property's assessed value for taxation
Correct — C. An appraisal is an objective, unbiased opinion of a property's market value prepared by a licensed or certified appraiser. It differs from a listing price or assessed value, which serve other purposes.
About the Texas Real Estate 26 test
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- Contracts, financing and escrow
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- Valuation, math and transaction practice
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Topics in this question bank
Property ownership, agency and disclosure
Contracts, financing and escrow
Real estate law and fair-housing rules
Valuation, math and transaction practice
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