TEXAS REAL ESTATE BROKER EXAM – PRACTICE QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS) PLUS RATIONALES 2026
Q&A | INSTANT DOWNLOAD PDF.
*Core Domains*
*Agency Relationships*
*Contracts and Addenda*
*Texas Real Estate Commission Rules*
*Brokerage Management and Operations*
*Finance and Settlement Procedures*
*Property Management*
*Professional Ethics and Standards*
*Federal and State Laws*
*Leasing and Property Laws*
*Introduction*
The Texas Real Estate Broker Exam assessment is designed to evaluate a candidate's readiness for high-level professional practice within the state’s
real estate industry. This comprehensive exam focuses on the advanced skills and knowledge required to operate a brokerage, manage licensed
agents, and navigate complex legal frameworks. The structure comprises multiple-choice and scenario-based questions that challenge candidates to
apply theoretical knowledge to practical situations. Significant emphasis is placed on real-world decision-making, ethical leadership, and regulatory
compliance. Success on this exam demonstrates a thorough understanding of the fiduciary duties and legal responsibilities essential for protecting the
public and maintaining industry integrity.
SECTION ONE: QUESTIONS 1–100
1. A broker is reviewing a sales agent's advertisement. The ad includes the agent’s name and a nickname, but the broker’s registered business
name is only half the size of the agent’s name. Under TREC rules, is this advertisement compliant?
A. Yes, as long as the broker's name is present.
B. Yes, if the agent paid for the advertisement personally.
C. No, the broker’s name must be at least half the size of the largest contact information.
D. No, the broker’s name must be at least as large as the agent’s name.
🟢 D. No, the broker’s name must be at least as large as the agent’s name.
,🔴 RATIONALE: TREC Rule 535.155 requires that the broker’s name or registered business name be at least 50% of the size of the largest item of
contact information in the advertisement, but specifically for Texas Brokers, the name must be clearly and conspicuously displayed and at least as
large as the agent's name to avoid misleading the public.
2. Which of the following is an example of a "commingling" violation under the Texas Real Estate License Act?
A. Depositing earnest money into a designated escrow account within two business days.
B. Placing a client's earnest money check into the broker's personal operating account.
C. Paying a sales agent's commission directly from the brokerage trust account.
D. Refusing to accept cash for an earnest money deposit.
🟢 B. Placing a client's earnest money check into the broker's personal operating account.
🔴 RATIONALE: Commingling is the illegal act of mixing client funds (earnest money, security deposits) with personal or business operating funds.
These must be kept in a separate trust or escrow account.
3. An individual is acting as a "locating agent" for an apartment complex. They receive a free month of rent for every tenant they sign. Do they
need a real estate license in Texas?
A. No, because they are receiving rent credit instead of cash.
B. No, if they only work for one owner at one complex.
C. Yes, because they are receiving valuable consideration for referring tenants.
D. Yes, only if they sign more than five leases per year.
🟢 C. Yes, because they are receiving valuable consideration for referring tenants.
🔴 RATIONALE: Under the Texas Real Estate License Act, any person who controls the acceptance or deposit of rent or provides leads for a fee or
valuable consideration (including rent credits) must be licensed.
4. A broker manages several properties for an owner. The owner instructs the broker to use the security deposits of current tenants to pay for
emergency repairs on a vacant unit. What should the broker do?
A. Comply with the owner's request as a fiduciary duty of obedience.
B. Refuse the request, as security deposits are held in trust for the tenants.
C. Use the funds only if the owner promises to repay them within 30 days.
D. Transfer the funds and document it as a loan from the tenants.
🟢 B. Refuse the request, as security deposits are held in trust for the tenants.
,🔴 RATIONALE: Security deposits belong to the tenants and are held in trust. Using these funds for anything other than the specific tenant's lease
obligations or damages is a breach of trust and a violation of TRELA.
5. When a broker’s license is suspended or revoked, what is the immediate status of the licenses of the sales agents sponsored by that broker?
A. They are automatically transferred to TREC.
B. They remain active for 30 days to allow for a transfer.
C. They are placed on inactive status.
D. They are revoked alongside the broker's license.
🟢 C. They are placed on inactive status.
🔴 RATIONALE: If a broker's license is no longer active, the sponsorship of agents terminates immediately, and those agents' licenses are placed
on inactive status until a new broker-sponsor is found.
6. Under the Deceptive Trade Practices Act (DTPA), a broker can be held liable for an "act of omission." Which of the following best defines this?
A. Making a false statement about the property's square footage.
B. Forgetting to sign the listing agreement.
C. Failing to disclose a known material defect to a buyer.
D. Charging a commission higher than the industry average.
🟢 C. Failing to disclose a known material defect to a buyer.
🔴 RATIONALE: An act of omission involves the failure to disclose information that was known at the time of the transaction if such failure was
intended to induce the consumer into a transaction they would not have otherwise entered.
7. A buyer's agent is aware that the seller of a property is motivated by a pending divorce. When should the agent disclose this information to
the buyer?
A. Never, as it violates the seller's privacy.
B. Only if the buyer asks specifically about the seller's motivation.
C. Immediately, as it is a material fact that benefits the buyer's negotiating position.
D. Only if the agent also represents the seller.
🟢 C. Immediately, as it is a material fact that benefits the buyer's negotiating position.
🔴 RATIONALE: A buyer's agent owes a fiduciary duty to the buyer, which includes the duty of full disclosure of all facts that might affect the
buyer's decision or ability to negotiate, including the seller's motivation.
, 8. Which of the following is NOT a requirement for a valid intermediary relationship in Texas?
A. The broker must obtain written consent from both parties.
B. The broker must appoint at least one agent to each side.
C. The written consent must state the source of expected compensation.
D. The broker must treat all parties honestly and fairly.
🟢 B. The broker must appoint at least one agent to each side.
🔴 RATIONALE: A broker can act as an intermediary without appointments (remaining neutral and not giving advice). Appointments are optional
but require written consent and at least two agents under the broker.
9. In a standard TREC residential contract, what happens to the earnest money if the buyer terminates the contract within the option period?
A. It is forfeited to the seller.
B. It is split equally between the broker and the seller.
C. It is refunded to the buyer.
D. It is held by the title company until the house is sold to someone else.
🟢 C. It is refunded to the buyer.
🔴 RATIONALE: If a buyer has a valid termination option and exercises it within the specified timeframe, they are entitled to a refund of their
earnest money, though the option fee is typically retained by the seller.
10. A broker is opening a new branch office. How many broker licenses are required for the firm to operate two locations?
A. One for the main office and one for the branch.
B. One broker license covers all locations within the state.
C. A separate broker license for every 10 agents at each location.
D. One main license and a branch office license for each additional location.
🟢 D. One main license and a branch office license for each additional location.
🔴 RATIONALE: TREC requires a broker to obtain a branch office license for each additional place of business maintained by the broker.
11. According to the Texas Property Code, how long does a landlord have to return a tenant’s security deposit after the tenant vacates the
premises?
Q&A | INSTANT DOWNLOAD PDF.
*Core Domains*
*Agency Relationships*
*Contracts and Addenda*
*Texas Real Estate Commission Rules*
*Brokerage Management and Operations*
*Finance and Settlement Procedures*
*Property Management*
*Professional Ethics and Standards*
*Federal and State Laws*
*Leasing and Property Laws*
*Introduction*
The Texas Real Estate Broker Exam assessment is designed to evaluate a candidate's readiness for high-level professional practice within the state’s
real estate industry. This comprehensive exam focuses on the advanced skills and knowledge required to operate a brokerage, manage licensed
agents, and navigate complex legal frameworks. The structure comprises multiple-choice and scenario-based questions that challenge candidates to
apply theoretical knowledge to practical situations. Significant emphasis is placed on real-world decision-making, ethical leadership, and regulatory
compliance. Success on this exam demonstrates a thorough understanding of the fiduciary duties and legal responsibilities essential for protecting the
public and maintaining industry integrity.
SECTION ONE: QUESTIONS 1–100
1. A broker is reviewing a sales agent's advertisement. The ad includes the agent’s name and a nickname, but the broker’s registered business
name is only half the size of the agent’s name. Under TREC rules, is this advertisement compliant?
A. Yes, as long as the broker's name is present.
B. Yes, if the agent paid for the advertisement personally.
C. No, the broker’s name must be at least half the size of the largest contact information.
D. No, the broker’s name must be at least as large as the agent’s name.
🟢 D. No, the broker’s name must be at least as large as the agent’s name.
,🔴 RATIONALE: TREC Rule 535.155 requires that the broker’s name or registered business name be at least 50% of the size of the largest item of
contact information in the advertisement, but specifically for Texas Brokers, the name must be clearly and conspicuously displayed and at least as
large as the agent's name to avoid misleading the public.
2. Which of the following is an example of a "commingling" violation under the Texas Real Estate License Act?
A. Depositing earnest money into a designated escrow account within two business days.
B. Placing a client's earnest money check into the broker's personal operating account.
C. Paying a sales agent's commission directly from the brokerage trust account.
D. Refusing to accept cash for an earnest money deposit.
🟢 B. Placing a client's earnest money check into the broker's personal operating account.
🔴 RATIONALE: Commingling is the illegal act of mixing client funds (earnest money, security deposits) with personal or business operating funds.
These must be kept in a separate trust or escrow account.
3. An individual is acting as a "locating agent" for an apartment complex. They receive a free month of rent for every tenant they sign. Do they
need a real estate license in Texas?
A. No, because they are receiving rent credit instead of cash.
B. No, if they only work for one owner at one complex.
C. Yes, because they are receiving valuable consideration for referring tenants.
D. Yes, only if they sign more than five leases per year.
🟢 C. Yes, because they are receiving valuable consideration for referring tenants.
🔴 RATIONALE: Under the Texas Real Estate License Act, any person who controls the acceptance or deposit of rent or provides leads for a fee or
valuable consideration (including rent credits) must be licensed.
4. A broker manages several properties for an owner. The owner instructs the broker to use the security deposits of current tenants to pay for
emergency repairs on a vacant unit. What should the broker do?
A. Comply with the owner's request as a fiduciary duty of obedience.
B. Refuse the request, as security deposits are held in trust for the tenants.
C. Use the funds only if the owner promises to repay them within 30 days.
D. Transfer the funds and document it as a loan from the tenants.
🟢 B. Refuse the request, as security deposits are held in trust for the tenants.
,🔴 RATIONALE: Security deposits belong to the tenants and are held in trust. Using these funds for anything other than the specific tenant's lease
obligations or damages is a breach of trust and a violation of TRELA.
5. When a broker’s license is suspended or revoked, what is the immediate status of the licenses of the sales agents sponsored by that broker?
A. They are automatically transferred to TREC.
B. They remain active for 30 days to allow for a transfer.
C. They are placed on inactive status.
D. They are revoked alongside the broker's license.
🟢 C. They are placed on inactive status.
🔴 RATIONALE: If a broker's license is no longer active, the sponsorship of agents terminates immediately, and those agents' licenses are placed
on inactive status until a new broker-sponsor is found.
6. Under the Deceptive Trade Practices Act (DTPA), a broker can be held liable for an "act of omission." Which of the following best defines this?
A. Making a false statement about the property's square footage.
B. Forgetting to sign the listing agreement.
C. Failing to disclose a known material defect to a buyer.
D. Charging a commission higher than the industry average.
🟢 C. Failing to disclose a known material defect to a buyer.
🔴 RATIONALE: An act of omission involves the failure to disclose information that was known at the time of the transaction if such failure was
intended to induce the consumer into a transaction they would not have otherwise entered.
7. A buyer's agent is aware that the seller of a property is motivated by a pending divorce. When should the agent disclose this information to
the buyer?
A. Never, as it violates the seller's privacy.
B. Only if the buyer asks specifically about the seller's motivation.
C. Immediately, as it is a material fact that benefits the buyer's negotiating position.
D. Only if the agent also represents the seller.
🟢 C. Immediately, as it is a material fact that benefits the buyer's negotiating position.
🔴 RATIONALE: A buyer's agent owes a fiduciary duty to the buyer, which includes the duty of full disclosure of all facts that might affect the
buyer's decision or ability to negotiate, including the seller's motivation.
, 8. Which of the following is NOT a requirement for a valid intermediary relationship in Texas?
A. The broker must obtain written consent from both parties.
B. The broker must appoint at least one agent to each side.
C. The written consent must state the source of expected compensation.
D. The broker must treat all parties honestly and fairly.
🟢 B. The broker must appoint at least one agent to each side.
🔴 RATIONALE: A broker can act as an intermediary without appointments (remaining neutral and not giving advice). Appointments are optional
but require written consent and at least two agents under the broker.
9. In a standard TREC residential contract, what happens to the earnest money if the buyer terminates the contract within the option period?
A. It is forfeited to the seller.
B. It is split equally between the broker and the seller.
C. It is refunded to the buyer.
D. It is held by the title company until the house is sold to someone else.
🟢 C. It is refunded to the buyer.
🔴 RATIONALE: If a buyer has a valid termination option and exercises it within the specified timeframe, they are entitled to a refund of their
earnest money, though the option fee is typically retained by the seller.
10. A broker is opening a new branch office. How many broker licenses are required for the firm to operate two locations?
A. One for the main office and one for the branch.
B. One broker license covers all locations within the state.
C. A separate broker license for every 10 agents at each location.
D. One main license and a branch office license for each additional location.
🟢 D. One main license and a branch office license for each additional location.
🔴 RATIONALE: TREC requires a broker to obtain a branch office license for each additional place of business maintained by the broker.
11. According to the Texas Property Code, how long does a landlord have to return a tenant’s security deposit after the tenant vacates the
premises?
