Texas Real Estate National Exam Questions and
Answers Latest Update | Texas Real Estate
License National Portion Comprehensive Study
Guide, Practice Test Bank, Verified Questions
with Detailed Rationales for Candidates
Preparing for the Texas Real Estate
Salesperson and Broker Licensing Exam
Question 1: Which of the following best describes the primary purpose of the Texas Real Estate
Commission (TREC)?
A. To provide mortgage financing assistance to first-time homebuyers
B. To regulate real estate license holders and protect consumers in real estate transactions
C. To appraise residential and commercial properties throughout Texas
D. To manage public housing developments in major Texas metropolitan areas
CORRECT ANSWER: B. To regulate real estate license holders and protect consumers in real estate
transactions
RATIONALE: The Texas Real Estate Commission (TREC) is the state agency responsible for enforcing the
Texas Real Estate License Act. Its mission is to protect consumers by regulating the conduct of real
estate license holders, establishing education requirements, and ensuring ethical practices in real estate
transactions. TREC does not provide financing, appraise property, or manage housing developments.
Question 2: Under Texas law, what is the statutory limit on the amount of earnest money a buyer may
be required to deposit in a residential real estate contract?
A. 1% of the purchase price
B. 3% of the purchase price
C. 10% of the purchase price
D. There is no statutory limit; the amount is negotiable between parties
CORRECT ANSWER: D. There is no statutory limit; the amount is negotiable between parties
RATIONALE: Texas law does not prescribe a specific amount or percentage for earnest money deposits
in residential real estate contracts. The amount is entirely negotiable between the buyer and seller and
is typically outlined in the promulgated TREC contract forms. While customary amounts often range
from 1-3%, parties may agree to any amount that reflects their mutual understanding and risk
allocation.
Question 3: Which federal law prohibits discrimination in housing based on race, color, religion, sex,
national origin, familial status, or disability?
A. Americans with Disabilities Act (ADA)
B. Fair Housing Act
,Texas Real Estate National Exam Questions and
Answers Latest Update | Texas Real Estate
License National Portion Comprehensive Study
Guide, Practice Test Bank, Verified Questions
with Detailed Rationales for Candidates
Preparing for the Texas Real Estate
Salesperson and Broker Licensing Exam
C. Equal Credit Opportunity Act (ECOA)
D. Civil Rights Act of 1866
CORRECT ANSWER: B. Fair Housing Act
RATIONALE: The federal Fair Housing Act, enacted as Title VIII of the Civil Rights Act of 1968 and
amended in 1988, prohibits discrimination in the sale, rental, and financing of housing based on seven
protected classes: race, color, religion, sex, national origin, familial status, and disability. While the Civil
Rights Act of 1866 also prohibits racial discrimination in property transactions, the Fair Housing Act
provides broader protections and enforcement mechanisms.
Question 4: In Texas, what is the minimum age requirement to obtain a real estate sales agent
license?
A. 18 years old
B. 19 years old
C. 21 years old
D. 25 years old
CORRECT ANSWER: A. 18 years old
RATIONALE: According to the Texas Real Estate License Act and TREC rules, an applicant for a real
estate sales agent license must be at least 18 years of age, a U.S. citizen or lawfully admitted alien,
complete 180 hours of qualifying education, pass the licensing examination, and be sponsored by an
active Texas broker. There is no requirement to be 21 or older for a sales agent license.
Question 5: Which type of deed provides the greatest protection to the grantee by including
covenants of seisin, right to convey, against encumbrances, and warranty of quiet enjoyment?
A. Quitclaim deed
B. Special warranty deed
C. General warranty deed
D. Bargain and sale deed
CORRECT ANSWER: C. General warranty deed
RATIONALE: A general warranty deed offers the highest level of protection to the grantee because the
grantor makes comprehensive covenants, including: (1) covenant of seisin (grantor owns the property),
(2) covenant of right to convey, (3) covenant against encumbrances, (4) covenant of quiet enjoyment,
,Texas Real Estate National Exam Questions and
Answers Latest Update | Texas Real Estate
License National Portion Comprehensive Study
Guide, Practice Test Bank, Verified Questions
with Detailed Rationales for Candidates
Preparing for the Texas Real Estate
Salesperson and Broker Licensing Exam
(5) covenant of warranty, and (6) covenant for further assurances. These covenants protect the grantee
against defects in title arising at any time, even before the grantor owned the property.
Question 6: Under the Texas Property Code, how many days' written notice must a landlord provide a
tenant before terminating a month-to-month tenancy without cause?
A. 7 days
B. 15 days
C. 30 days
D. 60 days
CORRECT ANSWER: C. 30 days
RATIONALE: Texas Property Code § 91.001 requires that either party to a month-to-month residential
lease must provide at least 30 days' written notice to terminate the tenancy. This notice period applies
regardless of whether the termination is with or without cause, unless the lease agreement specifies a
longer notice period. Shorter notice periods are not enforceable under Texas law for month-to-month
tenancies.
Question 7: What is the primary function of a title insurance policy in a real estate transaction?
A. To guarantee the property's market value at the time of sale
B. To protect against financial loss due to defects in title not discovered during the title search
C. To insure the physical structure of the property against fire and casualty losses
D. To provide liability coverage for the real estate agent during the transaction
CORRECT ANSWER: B. To protect against financial loss due to defects in title not discovered during the
title search
RATIONALE: Title insurance protects the policyholder (either the lender or the owner) against financial
loss resulting from defects in the title to real property that were not identified during the title
examination. These defects may include undisclosed heirs, forged documents, recording errors, or
undisclosed easements. Unlike other insurance policies, title insurance is a one-time premium paid at
closing and provides coverage for as long as the insured retains an interest in the property.
Question 8: Which of the following is a required element for a valid real estate contract under Texas
law?
, Texas Real Estate National Exam Questions and
Answers Latest Update | Texas Real Estate
License National Portion Comprehensive Study
Guide, Practice Test Bank, Verified Questions
with Detailed Rationales for Candidates
Preparing for the Texas Real Estate
Salesperson and Broker Licensing Exam
A. Notarization of all parties' signatures
B. A complete legal description of the property
C. Inclusion of a financing contingency clause
D. Approval by the local county appraisal district
CORRECT ANSWER: B. A complete legal description of the property
RATIONALE: For a real estate contract to be enforceable under Texas law, it must satisfy the Statute of
Frauds, which requires that contracts for the sale of real estate be in writing and contain essential terms,
including a sufficient legal description of the property to identify it with reasonable certainty. While
notarization is required for recording deeds, it is not required for contract validity. Financing
contingencies and appraisal district approval are not mandatory elements.
Question 9: What does the term "procuring cause" refer to in real estate brokerage?
A. The legal requirement for brokers to disclose all material facts about a property
B. The principle that determines which broker is entitled to a commission based on who initiated the
chain of events leading to the sale
C. The process by which a buyer obtains mortgage pre-approval
D. The statutory timeline for submitting offers to a seller
CORRECT ANSWER: B. The principle that determines which broker is entitled to a commission based
on who initiated the chain of events leading to the sale
RATIONALE: "Procuring cause" is a legal doctrine used to determine which real estate broker is entitled
to a commission when multiple brokers claim involvement in a transaction. The broker who can
demonstrate that their efforts were the primary, continuous, and direct cause of bringing about the
sale—by initiating an unbroken sequence of events that led to the transaction—is typically deemed the
procuring cause and thus entitled to compensation.
Question 10: Under Texas law, which of the following disclosures is NOT required by a seller of
residential property?
A. Known material defects affecting the property's value or desirability
B. Whether the property is located in a floodplain
C. The seller's motivation for selling the property
D. Information about pending special assessments by a homeowners' association
Answers Latest Update | Texas Real Estate
License National Portion Comprehensive Study
Guide, Practice Test Bank, Verified Questions
with Detailed Rationales for Candidates
Preparing for the Texas Real Estate
Salesperson and Broker Licensing Exam
Question 1: Which of the following best describes the primary purpose of the Texas Real Estate
Commission (TREC)?
A. To provide mortgage financing assistance to first-time homebuyers
B. To regulate real estate license holders and protect consumers in real estate transactions
C. To appraise residential and commercial properties throughout Texas
D. To manage public housing developments in major Texas metropolitan areas
CORRECT ANSWER: B. To regulate real estate license holders and protect consumers in real estate
transactions
RATIONALE: The Texas Real Estate Commission (TREC) is the state agency responsible for enforcing the
Texas Real Estate License Act. Its mission is to protect consumers by regulating the conduct of real
estate license holders, establishing education requirements, and ensuring ethical practices in real estate
transactions. TREC does not provide financing, appraise property, or manage housing developments.
Question 2: Under Texas law, what is the statutory limit on the amount of earnest money a buyer may
be required to deposit in a residential real estate contract?
A. 1% of the purchase price
B. 3% of the purchase price
C. 10% of the purchase price
D. There is no statutory limit; the amount is negotiable between parties
CORRECT ANSWER: D. There is no statutory limit; the amount is negotiable between parties
RATIONALE: Texas law does not prescribe a specific amount or percentage for earnest money deposits
in residential real estate contracts. The amount is entirely negotiable between the buyer and seller and
is typically outlined in the promulgated TREC contract forms. While customary amounts often range
from 1-3%, parties may agree to any amount that reflects their mutual understanding and risk
allocation.
Question 3: Which federal law prohibits discrimination in housing based on race, color, religion, sex,
national origin, familial status, or disability?
A. Americans with Disabilities Act (ADA)
B. Fair Housing Act
,Texas Real Estate National Exam Questions and
Answers Latest Update | Texas Real Estate
License National Portion Comprehensive Study
Guide, Practice Test Bank, Verified Questions
with Detailed Rationales for Candidates
Preparing for the Texas Real Estate
Salesperson and Broker Licensing Exam
C. Equal Credit Opportunity Act (ECOA)
D. Civil Rights Act of 1866
CORRECT ANSWER: B. Fair Housing Act
RATIONALE: The federal Fair Housing Act, enacted as Title VIII of the Civil Rights Act of 1968 and
amended in 1988, prohibits discrimination in the sale, rental, and financing of housing based on seven
protected classes: race, color, religion, sex, national origin, familial status, and disability. While the Civil
Rights Act of 1866 also prohibits racial discrimination in property transactions, the Fair Housing Act
provides broader protections and enforcement mechanisms.
Question 4: In Texas, what is the minimum age requirement to obtain a real estate sales agent
license?
A. 18 years old
B. 19 years old
C. 21 years old
D. 25 years old
CORRECT ANSWER: A. 18 years old
RATIONALE: According to the Texas Real Estate License Act and TREC rules, an applicant for a real
estate sales agent license must be at least 18 years of age, a U.S. citizen or lawfully admitted alien,
complete 180 hours of qualifying education, pass the licensing examination, and be sponsored by an
active Texas broker. There is no requirement to be 21 or older for a sales agent license.
Question 5: Which type of deed provides the greatest protection to the grantee by including
covenants of seisin, right to convey, against encumbrances, and warranty of quiet enjoyment?
A. Quitclaim deed
B. Special warranty deed
C. General warranty deed
D. Bargain and sale deed
CORRECT ANSWER: C. General warranty deed
RATIONALE: A general warranty deed offers the highest level of protection to the grantee because the
grantor makes comprehensive covenants, including: (1) covenant of seisin (grantor owns the property),
(2) covenant of right to convey, (3) covenant against encumbrances, (4) covenant of quiet enjoyment,
,Texas Real Estate National Exam Questions and
Answers Latest Update | Texas Real Estate
License National Portion Comprehensive Study
Guide, Practice Test Bank, Verified Questions
with Detailed Rationales for Candidates
Preparing for the Texas Real Estate
Salesperson and Broker Licensing Exam
(5) covenant of warranty, and (6) covenant for further assurances. These covenants protect the grantee
against defects in title arising at any time, even before the grantor owned the property.
Question 6: Under the Texas Property Code, how many days' written notice must a landlord provide a
tenant before terminating a month-to-month tenancy without cause?
A. 7 days
B. 15 days
C. 30 days
D. 60 days
CORRECT ANSWER: C. 30 days
RATIONALE: Texas Property Code § 91.001 requires that either party to a month-to-month residential
lease must provide at least 30 days' written notice to terminate the tenancy. This notice period applies
regardless of whether the termination is with or without cause, unless the lease agreement specifies a
longer notice period. Shorter notice periods are not enforceable under Texas law for month-to-month
tenancies.
Question 7: What is the primary function of a title insurance policy in a real estate transaction?
A. To guarantee the property's market value at the time of sale
B. To protect against financial loss due to defects in title not discovered during the title search
C. To insure the physical structure of the property against fire and casualty losses
D. To provide liability coverage for the real estate agent during the transaction
CORRECT ANSWER: B. To protect against financial loss due to defects in title not discovered during the
title search
RATIONALE: Title insurance protects the policyholder (either the lender or the owner) against financial
loss resulting from defects in the title to real property that were not identified during the title
examination. These defects may include undisclosed heirs, forged documents, recording errors, or
undisclosed easements. Unlike other insurance policies, title insurance is a one-time premium paid at
closing and provides coverage for as long as the insured retains an interest in the property.
Question 8: Which of the following is a required element for a valid real estate contract under Texas
law?
, Texas Real Estate National Exam Questions and
Answers Latest Update | Texas Real Estate
License National Portion Comprehensive Study
Guide, Practice Test Bank, Verified Questions
with Detailed Rationales for Candidates
Preparing for the Texas Real Estate
Salesperson and Broker Licensing Exam
A. Notarization of all parties' signatures
B. A complete legal description of the property
C. Inclusion of a financing contingency clause
D. Approval by the local county appraisal district
CORRECT ANSWER: B. A complete legal description of the property
RATIONALE: For a real estate contract to be enforceable under Texas law, it must satisfy the Statute of
Frauds, which requires that contracts for the sale of real estate be in writing and contain essential terms,
including a sufficient legal description of the property to identify it with reasonable certainty. While
notarization is required for recording deeds, it is not required for contract validity. Financing
contingencies and appraisal district approval are not mandatory elements.
Question 9: What does the term "procuring cause" refer to in real estate brokerage?
A. The legal requirement for brokers to disclose all material facts about a property
B. The principle that determines which broker is entitled to a commission based on who initiated the
chain of events leading to the sale
C. The process by which a buyer obtains mortgage pre-approval
D. The statutory timeline for submitting offers to a seller
CORRECT ANSWER: B. The principle that determines which broker is entitled to a commission based
on who initiated the chain of events leading to the sale
RATIONALE: "Procuring cause" is a legal doctrine used to determine which real estate broker is entitled
to a commission when multiple brokers claim involvement in a transaction. The broker who can
demonstrate that their efforts were the primary, continuous, and direct cause of bringing about the
sale—by initiating an unbroken sequence of events that led to the transaction—is typically deemed the
procuring cause and thus entitled to compensation.
Question 10: Under Texas law, which of the following disclosures is NOT required by a seller of
residential property?
A. Known material defects affecting the property's value or desirability
B. Whether the property is located in a floodplain
C. The seller's motivation for selling the property
D. Information about pending special assessments by a homeowners' association
