Texas Real Estate Practice Test (Free)

Free Texas practice questions

10 questions written for the Texas exam, drawn from 112 in the ApexAgent bank. The correct answer and the reasoning are under each one.

1. 1. Which of the following is true regarding the Texas Real Estate Commission?

   • A. Commissioners serve staggered 3-year terms
   • B. Nine members are elected to 6-year terms
   • C. Three members must represent the public ✓
   • D. Six members are appointed by the governor with the approval of the Senate

   Why: The governor appoints all nine members, three of whom must represent the public and be voters. Commissioners serve staggered 6-year terms

2. 2. The TREC is empowered to

   • A. enact laws to administer license law statutes
   • B. discipline violators of license laws ✓
   • C. establish uniform standards of business practice including market area delineations and commissions
   • D. impose incarceration sentences for flagrant violators of license law

   Why: TREC is charged with the responsibility to administer and enforce license laws, including disciplining violators. It does not, however, enact laws, as such is the province of the legislature, nor can it impose jail sentences. Further, TREC does not regulate day-to-day brokerage operations such as market area definitions or commissions

3. 3. The purpose of the Education Standards Advisory Committee (ESAC) is to

   • A. establish and maintain education standards for fulfillment of the education-related aspects of Texas license laws ✓
   • B. hire and manage real estate examination consultants to deliver the state license examination
   • C. approve the delivery performances of real estate instructors on an ongoing basis
   • D. standardize education requirements for licensees and schools

   Why: The ESAC operates in an advisory capacity to the TREC to establish specific guidelines and standards for teachers and schools in fulfilling education-related licensing requirements. It cannot in itself establish license requirements, not does it serve to deliver and administer the license exam. Finally, while it may establish teaching standards, it does not literally audit delivery performances of instructors

4. 4. In fulfilling its regulatory role, TREC is empowered to

   • A. convict licensees of misdemeanors or felonies
   • B. dissolve offending business entities such as real estate management companies
   • C. amend license laws if deemed to be illegal or unfair
   • D. impose fines as well as suspend or revoke licenses ✓

   Why: TREC's principle legal muscle lies in its empowerment to suspend or revoke licenses which effectively stops a violating practitioner from earning a living. These sanctions may also be accompanied by fines – but cannot rise to the level of felony conviction. That is outside of its jurisdiction. TREC further may not dissolve a business – it can only prevent it from practicing real estate

5. 5. If a licensee's suspension is upheld following a hearing, the licensee

   • A. may appeal to a district court where the hearing was held ✓
   • B. may appeal to an appellate court where the violation occurred
   • C. may sue in district court for injunctive relief
   • D. may not appeal the TREC's decision

   Why: Licensees guilty of a violation may still pursue an appeal within the district court where the hearing was held

6. 6. Which of the following is true regarding the Texas Real Estate Recovery Trust Fund?

   • A. Licensees must prominently display Form 1-1 to consumers advising them of the importance of caveat emptor, or let the buyer beware
   • B. Licensees fund the trust account through fines and judgments issued by the TREC
   • C. The trust fund exists to assist licensees in financing the payment of judgments to consumers
   • D. Licensees must disclose to consumers that there is a trust fund in Texas to satisfy judgments and reimburse parties damages from the actions of licensees ✓

   Why: The Recovery Fund serves the purpose of reimbursing public parties damaged by improper actions of licensees. The trust account is funded by fees periodically paid by all licensees. Agents are required to disclose the existence of the trust fund to the public via Form 1-1

7. 7. Which of the following is true regarding one's license status?

   • A. Sales agents who will be suspended must notify their broker in writing three days prior to the suspension ✓
   • B. Brokers who will be suspended must notify their sponsored agents of such an action within 7 days following the suspension
   • C. If a sales agent's license is suspended, the broker has 7 days to request a hearing
   • D. Licensees with suspended licenses may continue paid advertising, but must immediately cease all other brokerage practice

   Why: Sales agents and brokers must advise one another of any license suspension 3 days prior to the suspension, or sooner. Such an event for the broker causes all brokerage activity to cease in the brokerage, including all licensees. Advertising must cease as well since it is a brokerage activity

8. 8. Which of the following is true regarding complaints?

   • A. They must be filed within four years ✓
   • B. They may not be conducted covertly without the knowledge of all parties
   • C. They are adjudicated in the order they were received
   • D. They must be investigated regardless of their apparent merit or lack of it

   Why: Complainants have a maximum time limit of four years to make their complaint known. Further, only complaints with warranting evidence are investigated and adjudicated. Obviously specious complaints are dismissed. Finally, complaints may be processed as a function of their severity or jeopardy to the public welfare – not simply by chronology

9. 9. Which of the following best defines a broker?

   • A. A Texas resident who performs brokerage activities for compensation
   • B. A licensee who sells his/her own property
   • C. A person who performs brokerage activities for others for compensation ✓
   • D. A residential licensee who manages salespeople

   Why: A broker is a party engaged in specifically identified brokerage activities for others for compensation or with the expectation of compensation. It must be for other parties and it must involve compensation – but a "broker" does not have to be licensed to be defined as a broker

10. 10. Which of the following best defines a 'designated broker?

    • A. An active Texas broker designated by a licensed business entity to act on its behalf ✓
    • B. A non-officer of a licensed corporation named to conduct real estate activities on its behalf
    • C. A dual agent in a brokerage
    • D. A licensee who has successfully passed his or her required Realtor® designation curriculum

    Why: Designated brokers are active licensees working as an officer or partner in licensed business entities who have been designated to act on the organization's behalf

Want more Texas-specific questions? Practice the full Texas state-law set.