Free Texas Real Estate Practice Exam Questions (October 2026) 40+

The Real Estate Recovery Trust Account is a special fund established by Texas Real Estate Code to provide reimbursement to persons who are victims of fraud, misrepresentation or deceit committed by real estate licensees during the course of any transaction for which a license is required. The recovery revolving fund is designed to protect consumers.

Failure to satisfy the continuing education requirement by the license expiration date shall result in the renewed license being automatically placed on an "inactive" status.

All Texas brokers must maintain all documentation pertaining to trust account records for four years from the date the document is created or received.

The Texas Real Estate Commission prohibits a license holder from using a sales contract drafted by themselves or another licensee. The only type of sales contracts that can be used are ones that a licensed attorney drafts; or one that either buyer or seller draws up themselves. A licensee that draws up a contractual agreement for another party is in violation of TRELA and is guilty of the Unauthorized Practice of Law.

All individuals who hold an active Texas real estate license are required to complete 18 hours of Commission approved continuing education during each two year renewal period.

All are applicable laws in the state of Texas except the Texas Transfer of Rights and Ownership Act. That does not exist.

The Texas Real Estate Commission requires that all parties involved in the services of a broker be given the required information. All the information required is on an Information About Brokers Services Form. This must be given at first reasonable contact.

Under agency law in Texas dual agency is illegal. A license holder may not represent both principals as a dual agent under the revisions to TRELA.

The Texas Real Estate Commission consists of 9 people. Per Texas Real Estate License Act Sec. 1101.051.

All Texas Licensees must follow The Canons of Professional Ethics. The Texas Real Estate Commission wrote the Canons of Professional Ethics into the state statutes and since then all licensees must follow them. Via Chapter 531 of TREC Canons of Professional Ethics and Conduct.

Payments from the trust account for claims, including attorney's fees, interest, and court costs, arising out of a single transaction may not exceed a total of $50,000, regardless of the number of claimants. Per - Sec. 1101.610 of Texas Real Estate Code.

Cold calling or telemarketing for listings in Texas is legal but requires an active real estate license.

Under no circumstances can an unlicensed office personnel host open houses. Unlicensed assistants can set appointments to show a listing. Under the general rules of the state, it is permissible for an assistant to call a homeowner and schedule an appointment for the broker to bring a potential buyer to see the home. It is also permissible for an unlicensed assistant to assist in arranging financing; however, great care must be taken that the person acts solely in an administrative capacity.

Texas salespersons may only collect commissions directly from their employing brokers or with their brokers direct permission. They cannot receive compensation willy nilly from their buyer or seller. For example, if a builder offers a cash bonus in return for completed transactions, the sponsoring broker must approve the compensation before the agent can accept it.

The Canons of Professional Ethics include fidelity, integrity, and competency. Via Chapter 531 of TREC Canons of Professional Ethics and Conduct

An agent can in fact sign for a principal but only with the proper written authority. An example of that would be by power of attorney.

The Commission may NOT initiate an investigation on the basis of an anonymous complaint. The Commission can in fact and is required to investigate a signed written complaint that gives reasonable cause.

No. TREC Rule 535.146 prohibits a sales agent from maintaining a real estate trust account. Client trust money received by a sales agent must be delivered immediately to the sponsoring broker. This question concerns client funds handled in real estate brokerage, not the creation of a personal trust.

Source: TREC Rule 535.146.

Commingling is when a licensee mixes funds held in care for a client with their own funds.

Tina and Billy would both be liable. Remember, the agent represents the principal and in this case it's Tina. Billy’s representation of Tina and her property is legally binding so they would both be liable. It's up to Billy to do his due diligence and it's up to Tina to tell the truth, making them both liable.

At no time should a licensee give legal advice. The only exception is if the licensee is also an attorney.

Unlike some states, in Texas there is no state law that dictates what a broker may charge for a commission. The commission is completely negotiable in the listing contract.

There are eight protected classes in Texas Fair Housing. The protected classes are the basis of race, color, religion, sex, handicap, familial status, national origin or ancestry.

When you hear misrepresentation this is in reference to integrity. The real estate broker or sales agents special obligation to employ prudence and caution in the discharge of his or her duties to avoid misrepresentation is integrity.

The TREC may suspend or revoke a license if a licensee pleads guilty or is found guilty of a felony which includes fraud. Speeding tickets as well as not selling any properties will not result in a license being revoked.

Inactive status. TREC allows a regular license renewal in inactive status without completing continuing education (CE). The license holder cannot perform activities requiring an active license and must meet the applicable CE requirements before returning to active status. Sales Agent Apprentice Education (SAE) for an initial sales-agent renewal is a separate requirement and must be completed even when renewing inactive. See TREC’s license renewal requirements.

In terms of violation decisions, any ruling by the Texas Real Estate Commission can be appealed to a district court. Hopefully it does not come to that, but that is an option for violators that feel that are not being accurately represented.

The Texas Legislature established the Texas Appraiser Licensing & Certification Board (TALCB) in order to safeguard consumers in matters of real property appraisal services. TALCB shares staff members and resources with the Texas Real Estate Commission (TREC). Together TREC and TALCB oversee real estate brokerage, real property appraisals, inspections, home warranties, and timeshare opportunities.

The Texas Real Estate Commission is composed of nine members, each of whom shall be appointed by the Governor.

The Texas Real Estate Commission is abbreviated (TREC). The Commission is the state agency that governs ALL real estate practices in Texas.

Splitting the commission check with Isaac would not be allowed. A licensee is not permitted to divide a commission or fee with anyone that is not a licensed real estate broker or salesperson. He may however with his own personal money buy Isaac a gift card, give him cash, or of course pay him his normal fee.

No. Telemarketing is only permitted for active licensees.

No it is not. Commingling is a breach of trust in which a fiduciary mixes funds held in care for a client with their own funds. Commingling is illegal in Texas.

The TREC rules call for immediate presentation. All written offers should be presented to the property owner as quickly as it is reasonably possible. No real estate licensee has the right to withhold an offer from a property owner.

In Texas, when negotiating real estate contracts a licensee shall use only contract forms promulgated by The Texas Real Estate Commission. Any other contracts unless stated by law would be considered invalid.

In Texas, licensed activity is defined as anyone who lists, sells, leases, or deals in real estate transactions. If someone does any of those activities without a license it is considered unlicensed activity. In order to do prior tasks they must hold an active real estate license.

All individuals who hold an active Texas real estate license are required to complete 18 hours of Commission approved continuing education during each two year renewal period.

No. TREC Rule 535.4(c) states that a person must be licensed as a broker or sales agent to show a property. “Show” does infact include causing or permitting a property to be viewed by a prospective buyer.

The penalty collected for a violation by a Texas real estate broker or salesperson is deposited in the Texas Real Estate Recovery Trust Account.

No action for judgment, which results in an order for collection from the real estate recovery trust account, shall be started later than two years from the accrual of the cause of action. Per Texas Real Estate License Act.