TEXAS REAL ESTATE LATEST EXAM 2026 QUESTIONS AND
ANSWERS SURE A+
✔✔Compensation (Broker Responsibility) - ✔✔The major form of compensation for real
estate agents is commission from real estate transactions. The office policy should state
when agents receive commission. Furthermore, the policy should establish the standard
commission percentage and how the commission is split between the supervising
brokers and any agents who worked on a transaction.
-Per Section 1101.806 of TRELA, there are three requirements for compensation:
1.-The person held a valid real estate broker's license,
2.-The agreement to pay was in writing and signed by the party to be charged, and
3.-The broker or salesperson advised the buyer in writing before closing that the buyer
should obtain or be furnished with a title insurance policy or have the abstract covering
the subject property examined by an attorney of the buyer's choice.
✔✔Procuring Cause (Broker Responsibility) - ✔✔refers to situations where a client
utilizes the services of more than one broker during the process of transacting a piece
of real estate.
If the agents are not working together, there can be some confusion over who receives
a commission from the transaction. Common law awards the commission to the agent
that had the most direct influence on the transaction being completed.
✔✔Benefits(Broker Responsibility) - ✔✔Most employers offer benefits above and
beyond the basic compensation in order to entice employees to work for them.
Brokerages will commonly offer benefits to their employees just like any other business.
These benefits can include:
bonuses,
employer medical and/or life insurance,
vacation, sick, and overtime pay,
a profit sharing program,
retirement benefits, and
maternity leave.
✔✔Grievance Resolution(Broker Responsibility - ✔✔Whether the conflicts are between
individual agents or between agents and their supervising brokers, the office policy
needs to describe how these conflicts are resolved.
✔✔Market (Brokerage and Nature of the Brokerage Business) - ✔✔RULES
RESTRICTING ADVERTISING OR COMPETITIVE BIDDING.
(a) The commission may not adopt a rule restricting advertising or competitive bidding
by a person regulated by the commission except to prohibit a false, misleading, or
deceptive practice by the person.
(b) The commission may not include in rules to prohibit false, misleading, or deceptive
practices by a person regulated by the commission a rule that:
(1) restricts the use of any advertising medium;
,(2) restricts the person's personal appearance or use of the person's voice in an
advertisement;
(3) relates to the size or duration of an advertisement used by the person; or
(4) restricts the person's advertisement under a trade name that is authorized by a law
of this state and registered with the commission.
✔✔General Liability Insurance (Brokerage and Nature of the Brokerage Business) -
✔✔The general liability insurance covers the business, it does not have a property
component and so will not cover any damage done to the building. The party hurt by the
bookcases falling on them should be covered by this. Damage to the bookcases would
not.
✔✔The three big federal laws in this area. (Antitrust Laws) - ✔✔Sherman Antitrust Act
Clayton Antitrust Act
Robinson-Patman Act
✔✔Sherman Antitrust Act (Antitrust Laws) - ✔✔was passed in 1890 and was the federal
government's first step towards preventing monopolies and anticompetitive practices.
✔✔Clayton Antitrust Act (Antitrust Laws) - ✔✔of 1914 prohibited particular actions by a
business if those actions threatened to inhibit competition, including price discrimination,
price fixing and unfair trade practices.
✔✔Robinson-Patman Act (Antitrust Laws) - ✔✔was amended in 1936. The amendment
further prevented price discrimination by requiring that sellers not discriminate in pricing
when selling to equally-situated distributors, if the overall effect reduced competition.
✔✔Federal Trade Commission Act - ✔✔The third major antitrust statute was the
Federal Trade Commission Act, also establishing the Federal Trade Commission (FTC).
The FTC is the federal agency that is charged with protecting consumers by eliminating
fraud and various other unfair business practices. FTC §5 is a comprehensive
consumer protection act and includes all violations of the Sherman and Clayton Acts, as
well as a cross-section of other anticompetitive and deceptive practices.
✔✔Real Estate and Antitrust Laws (competitive practice) - ✔✔The following practices
are deemed a violation of antitrust regulations:
price fixing - where companies agree together to set prices for products.
group boycotting - where companies agree together to stop patronizing another
business to reduce competition.
fixing or controlling cooperative splits - competing brokerages agree to set commission
splits between agents in a particular multiple listing service.
controlling the contractual items in listing agreements - competing brokerages agreeing
to control the nature of items in listing agreements.
allocation of customers or markets - two or more competing brokerages agree to split up
a particular market in order to end competition between their brokerages.
,tie-in agreements - agreements that force customers to use other services with which a
real estate brokerage has a separate arrangement.
✔✔Fiduciary Relationship - ✔✔is one in which someone puts complete trust in another
person in regard to handling some kind of important task or tasks, usually of a financial
nature. An agency relationship is a fiduciary relationship because the principal party has
to put complete faith in the agent that is representing and acting for the principal party.
✔✔Duties as "Counterweight" (Fiduciary Duties) - ✔✔Fiduciary duties can be seen as a
counterweight to an agency relationship. As you will recall, under an agency relationship
the principal is responsible for any actions the agent takes. By tying the agency
relationship and the fiduciary relationship it means that an agent who acts contrary to
the best interests of their principal has violated their fiduciary duties and, therefore, their
agency agreement as they are not acting as an agent, but as a self-interested party.
✔✔Common Law Fiduciary Duties - ✔✔-Reasonable Care and Competence - As an
agent, the broker must exercise a reasonable degree of competence and care while
conducting the business with which the principal has entrusted them
-Obedience -The broker must obey the principal's instructions at all times and act in
good faith. The one caveat to this rule is that the broker is not required to perform illegal
acts on behalf of the principal.
-Accounting - The broker is liable to the principal, and the state, to keep accurate
records and copies of all documents relevant to the principal and the transaction. The
broker may not commingle funds, which means combine the principal's transaction cash
with any of the broker's resources.
-Loyalty - The broker owes a solemn duty of faithfulness, or loyalty, to their principal.
The principal's interests are always to be placed above those of the agent or broker, or
the other agent or broker in a transaction.
-Disclosure - In this case the broker or agent owes the principal a full, fair, and timely
accounting of all known facts relevant to the transaction. A broker or agent may be held
liable for damages for failing to disclose, as well.
-Confidentiality - The agent is under a strict obligation to protect any confidential
information provided by the client
✔✔Accounting (Common Law Fiduciary Duties) - ✔✔-Trust Account Management-One
of the most sensitive areas of real estate professional trust is the handling of client
funds. The two greatest dangers presented that may lead to either intentional or
unintentional mishandling of funds, and potential censure and litigation, are the
commingling of funds and the conversion of funds.
-Commingling - is the mixing in any manner of personal or business funds with client
trust funds. This can happen without any action of the licensee. In the instance where
there are fees or commissions earned that remain in a client's trust account that are not
removed in a timely manner, that is commingling.
-Conversion - is defined as the act of using money that does not belong to someone for
a purpose which it is not supposed to be used.
, ✔✔Texas Deceptive Trade Practices - Consumer Protection Act (DTPA) - ✔✔The
underlying policy of this 1973 Act is to protect Texans from false, misleading, and
deceptive business practices, and breaches of warranty. To this end, the Act prohibits
certain acts and practices that can deceive or mislead consumers. This Act does not
just apply to real estate, but to all industry that interacts with consumers. One of the
most powerful elements of the DTPA is its mandate to award attorney's fees in the
event a claim is successful.
✔✔Defenders and Critics of DTPA - ✔✔Critics, in particular, have contended that the
legislation encourages frivolous lawsuits by those who act on their belief that the legal
fees will be covered or a nuisance claim will be paid rather than take on legal costs. The
DTPA remains, nevertheless, a formidable consumer weapon. A "consumer" in the
DTPA context may be an individual, partnership, corporation, LLC, or even a state
agency. Suits may also be brought in the interest of consumers at large by the Texas
Attorney General's Consumer Protection Division and, with the AG's consent, by local
county and district attorneys.
✔✔Notice of a DTPA Claim - ✔✔A consumer wishing to pursue a DTPA claim must
provide written notice 60 days or more before filing suit. A broker who receives a notice
of a DTPA claim will want to promptly contact a lawyer to discuss a response to the
claim
✔✔DTPA's Importance for Real Estate Brokers - ✔✔The DTPA is intended to "make
consumers whole" when any false, misleading, or deceptive act or statement is the
producing cause of damages to the consumer. As a result, the DTPA is one of the most
commonly used causes of action by plaintiffs against real estate agents and brokers.
The DTPA is frequently used by buyers of residential properties claiming to have been a
victim of deception, abuse, fraud, or other injury by real estate agents, sellers, or
inspectors.
✔✔A Typical Real Estate Claim under the DTPA (DTPA's Importance for Real Estate
Brokers) - ✔✔-Representing that goods or services have sponsorship, approval,
characteristics, ingredients, uses, benefits, or quantities they do not have;
-Representing that goods are original or new when they are deteriorated, reconditioned,
reclaimed, used, or secondhand;
-Representing that goods or services are of a particular standard, quality, or grade, or
that goods are of a particular style or model, when they are not; and
-Failing to disclose information about goods or services that was known at the time of
the transaction if the failure to disclose was intended to induce the consumer into a
transaction that the consumer would not have entered into if the information had been
disclosed.
✔✔Related to Condition of the Property(A Typical Real Estate Claim under the DTPA) -
✔✔In the context of residential real estate transactions, this usually relates to the
condition of the property and usually comes from the following:
ANSWERS SURE A+
✔✔Compensation (Broker Responsibility) - ✔✔The major form of compensation for real
estate agents is commission from real estate transactions. The office policy should state
when agents receive commission. Furthermore, the policy should establish the standard
commission percentage and how the commission is split between the supervising
brokers and any agents who worked on a transaction.
-Per Section 1101.806 of TRELA, there are three requirements for compensation:
1.-The person held a valid real estate broker's license,
2.-The agreement to pay was in writing and signed by the party to be charged, and
3.-The broker or salesperson advised the buyer in writing before closing that the buyer
should obtain or be furnished with a title insurance policy or have the abstract covering
the subject property examined by an attorney of the buyer's choice.
✔✔Procuring Cause (Broker Responsibility) - ✔✔refers to situations where a client
utilizes the services of more than one broker during the process of transacting a piece
of real estate.
If the agents are not working together, there can be some confusion over who receives
a commission from the transaction. Common law awards the commission to the agent
that had the most direct influence on the transaction being completed.
✔✔Benefits(Broker Responsibility) - ✔✔Most employers offer benefits above and
beyond the basic compensation in order to entice employees to work for them.
Brokerages will commonly offer benefits to their employees just like any other business.
These benefits can include:
bonuses,
employer medical and/or life insurance,
vacation, sick, and overtime pay,
a profit sharing program,
retirement benefits, and
maternity leave.
✔✔Grievance Resolution(Broker Responsibility - ✔✔Whether the conflicts are between
individual agents or between agents and their supervising brokers, the office policy
needs to describe how these conflicts are resolved.
✔✔Market (Brokerage and Nature of the Brokerage Business) - ✔✔RULES
RESTRICTING ADVERTISING OR COMPETITIVE BIDDING.
(a) The commission may not adopt a rule restricting advertising or competitive bidding
by a person regulated by the commission except to prohibit a false, misleading, or
deceptive practice by the person.
(b) The commission may not include in rules to prohibit false, misleading, or deceptive
practices by a person regulated by the commission a rule that:
(1) restricts the use of any advertising medium;
,(2) restricts the person's personal appearance or use of the person's voice in an
advertisement;
(3) relates to the size or duration of an advertisement used by the person; or
(4) restricts the person's advertisement under a trade name that is authorized by a law
of this state and registered with the commission.
✔✔General Liability Insurance (Brokerage and Nature of the Brokerage Business) -
✔✔The general liability insurance covers the business, it does not have a property
component and so will not cover any damage done to the building. The party hurt by the
bookcases falling on them should be covered by this. Damage to the bookcases would
not.
✔✔The three big federal laws in this area. (Antitrust Laws) - ✔✔Sherman Antitrust Act
Clayton Antitrust Act
Robinson-Patman Act
✔✔Sherman Antitrust Act (Antitrust Laws) - ✔✔was passed in 1890 and was the federal
government's first step towards preventing monopolies and anticompetitive practices.
✔✔Clayton Antitrust Act (Antitrust Laws) - ✔✔of 1914 prohibited particular actions by a
business if those actions threatened to inhibit competition, including price discrimination,
price fixing and unfair trade practices.
✔✔Robinson-Patman Act (Antitrust Laws) - ✔✔was amended in 1936. The amendment
further prevented price discrimination by requiring that sellers not discriminate in pricing
when selling to equally-situated distributors, if the overall effect reduced competition.
✔✔Federal Trade Commission Act - ✔✔The third major antitrust statute was the
Federal Trade Commission Act, also establishing the Federal Trade Commission (FTC).
The FTC is the federal agency that is charged with protecting consumers by eliminating
fraud and various other unfair business practices. FTC §5 is a comprehensive
consumer protection act and includes all violations of the Sherman and Clayton Acts, as
well as a cross-section of other anticompetitive and deceptive practices.
✔✔Real Estate and Antitrust Laws (competitive practice) - ✔✔The following practices
are deemed a violation of antitrust regulations:
price fixing - where companies agree together to set prices for products.
group boycotting - where companies agree together to stop patronizing another
business to reduce competition.
fixing or controlling cooperative splits - competing brokerages agree to set commission
splits between agents in a particular multiple listing service.
controlling the contractual items in listing agreements - competing brokerages agreeing
to control the nature of items in listing agreements.
allocation of customers or markets - two or more competing brokerages agree to split up
a particular market in order to end competition between their brokerages.
,tie-in agreements - agreements that force customers to use other services with which a
real estate brokerage has a separate arrangement.
✔✔Fiduciary Relationship - ✔✔is one in which someone puts complete trust in another
person in regard to handling some kind of important task or tasks, usually of a financial
nature. An agency relationship is a fiduciary relationship because the principal party has
to put complete faith in the agent that is representing and acting for the principal party.
✔✔Duties as "Counterweight" (Fiduciary Duties) - ✔✔Fiduciary duties can be seen as a
counterweight to an agency relationship. As you will recall, under an agency relationship
the principal is responsible for any actions the agent takes. By tying the agency
relationship and the fiduciary relationship it means that an agent who acts contrary to
the best interests of their principal has violated their fiduciary duties and, therefore, their
agency agreement as they are not acting as an agent, but as a self-interested party.
✔✔Common Law Fiduciary Duties - ✔✔-Reasonable Care and Competence - As an
agent, the broker must exercise a reasonable degree of competence and care while
conducting the business with which the principal has entrusted them
-Obedience -The broker must obey the principal's instructions at all times and act in
good faith. The one caveat to this rule is that the broker is not required to perform illegal
acts on behalf of the principal.
-Accounting - The broker is liable to the principal, and the state, to keep accurate
records and copies of all documents relevant to the principal and the transaction. The
broker may not commingle funds, which means combine the principal's transaction cash
with any of the broker's resources.
-Loyalty - The broker owes a solemn duty of faithfulness, or loyalty, to their principal.
The principal's interests are always to be placed above those of the agent or broker, or
the other agent or broker in a transaction.
-Disclosure - In this case the broker or agent owes the principal a full, fair, and timely
accounting of all known facts relevant to the transaction. A broker or agent may be held
liable for damages for failing to disclose, as well.
-Confidentiality - The agent is under a strict obligation to protect any confidential
information provided by the client
✔✔Accounting (Common Law Fiduciary Duties) - ✔✔-Trust Account Management-One
of the most sensitive areas of real estate professional trust is the handling of client
funds. The two greatest dangers presented that may lead to either intentional or
unintentional mishandling of funds, and potential censure and litigation, are the
commingling of funds and the conversion of funds.
-Commingling - is the mixing in any manner of personal or business funds with client
trust funds. This can happen without any action of the licensee. In the instance where
there are fees or commissions earned that remain in a client's trust account that are not
removed in a timely manner, that is commingling.
-Conversion - is defined as the act of using money that does not belong to someone for
a purpose which it is not supposed to be used.
, ✔✔Texas Deceptive Trade Practices - Consumer Protection Act (DTPA) - ✔✔The
underlying policy of this 1973 Act is to protect Texans from false, misleading, and
deceptive business practices, and breaches of warranty. To this end, the Act prohibits
certain acts and practices that can deceive or mislead consumers. This Act does not
just apply to real estate, but to all industry that interacts with consumers. One of the
most powerful elements of the DTPA is its mandate to award attorney's fees in the
event a claim is successful.
✔✔Defenders and Critics of DTPA - ✔✔Critics, in particular, have contended that the
legislation encourages frivolous lawsuits by those who act on their belief that the legal
fees will be covered or a nuisance claim will be paid rather than take on legal costs. The
DTPA remains, nevertheless, a formidable consumer weapon. A "consumer" in the
DTPA context may be an individual, partnership, corporation, LLC, or even a state
agency. Suits may also be brought in the interest of consumers at large by the Texas
Attorney General's Consumer Protection Division and, with the AG's consent, by local
county and district attorneys.
✔✔Notice of a DTPA Claim - ✔✔A consumer wishing to pursue a DTPA claim must
provide written notice 60 days or more before filing suit. A broker who receives a notice
of a DTPA claim will want to promptly contact a lawyer to discuss a response to the
claim
✔✔DTPA's Importance for Real Estate Brokers - ✔✔The DTPA is intended to "make
consumers whole" when any false, misleading, or deceptive act or statement is the
producing cause of damages to the consumer. As a result, the DTPA is one of the most
commonly used causes of action by plaintiffs against real estate agents and brokers.
The DTPA is frequently used by buyers of residential properties claiming to have been a
victim of deception, abuse, fraud, or other injury by real estate agents, sellers, or
inspectors.
✔✔A Typical Real Estate Claim under the DTPA (DTPA's Importance for Real Estate
Brokers) - ✔✔-Representing that goods or services have sponsorship, approval,
characteristics, ingredients, uses, benefits, or quantities they do not have;
-Representing that goods are original or new when they are deteriorated, reconditioned,
reclaimed, used, or secondhand;
-Representing that goods or services are of a particular standard, quality, or grade, or
that goods are of a particular style or model, when they are not; and
-Failing to disclose information about goods or services that was known at the time of
the transaction if the failure to disclose was intended to induce the consumer into a
transaction that the consumer would not have entered into if the information had been
disclosed.
✔✔Related to Condition of the Property(A Typical Real Estate Claim under the DTPA) -
✔✔In the context of residential real estate transactions, this usually relates to the
condition of the property and usually comes from the following:
