Texas Real Estate Broker Exam — All Questions

A Texas wife inherits a rent house from her mother during the marriage. The house is:

• a.Her separate property, because it came to her by inheritance✓
• b.Community property, unless a separate-property schedule is recorded
• c.Community property, because it came to her during the marriage
• d.Half separate and half community, split at the date of the death

Family Code § 3.001: "A spouse's separate property consists of: (1) the property owned or claimed by the spouse before marriage; (2) the property acquired by the spouse during marriage by gift, devise, or descent; and (3) the recovery for personal injuries sustained by the spouse during marriage." An inheritance is acquired by devise or descent, so the timing does not convert it. Section 3.002 defines community property as "the property, other than separate property, acquired by either spouse during marriage," and the during-the-marriage answer is the classic error because it states that rule while ignoring the exception written into it. Section 3.003 does presume property possessed during marriage to be community, but it is a presumption, rebuttable by clear and convincing evidence, and § 3.004 makes recording a schedule of separate property optional — recording affects notice to a good-faith purchaser or creditor, not the character of the asset. Nothing in chapter 3 splits an inheritance between the two estates.

A single adult's rural Texas homestead is protected from creditors' claims up to:

• a.100 acres, together with the improvements on it✓
• b.200 acres, together with the improvements on it
• c.10 acres, together with the improvements on it
• d.A fixed dollar amount of the property's appraised value

Property Code § 41.002(b): a rural homestead "shall consist of: (1) for a family, not more than 200 acres, which may be in one or more parcels, with the improvements thereon; or (2) for a single, adult person, not otherwise entitled to a homestead, not more than 100 acres." So 200 acres is the family figure, and 10 acres is the urban figure at § 41.002(a), which applies where the property sits inside a municipality or its extraterritorial jurisdiction or a platted subdivision and is served by police protection, fire protection and at least three of the listed utilities under § 41.002(c). The dollar answer belongs to a different body of law entirely: Tax Code § 11.13 grants a residence homestead exemption from property TAX, which reduces a tax bill and protects nothing from a creditor, while Property Code § 41.001(a) is what exempts the homestead "from seizure for the claims of creditors." Texas has two homestead statutes and they answer different questions.

A Texas buyer sues her sales agent under the DTPA over the agent's estimate that the roof had five years left. The DTPA:

• a.Applies, because a license holder is a supplier of consumer services
• b.Does not apply to any claim brought against a license holder
• c.Applies, but caps the recovery at the agent's commission
• d.Does not apply, since the claim arises from advice or opinion✓

Business and Commerce Code § 17.49(i): "Nothing in this subchapter shall apply to a claim against a person licensed as a broker or salesperson under Chapter 1101, Occupations Code, arising from an act or omission by the person while acting as a broker or salesperson." An estimate of remaining roof life is advice or judgment, so it sits inside the exemption. The exemption is not total, though, which is why saying it bars every claim overstates it: the same subsection preserves "(1) an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion; (2) a failure to disclose information in violation of Section 17.46(b)(24); or (3) an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion." Treating the agent as an ordinary supplier of services ignores the subsection written for license holders specifically. And the Act never measures recovery by a commission: § 17.50(b)(1) awards economic damages and allows up to three times that amount where the conduct was committed knowingly.

A contractor wants an enforceable lien on a married couple's Texas homestead. The contract must be:

• a.Signed by the owner and delivered before the first payment falls due
• b.Signed by the owner and notarized before the lien affidavit is filed
• c.Signed by both spouses at any time before the work is completed
• d.Signed by both spouses before work begins, and filed with the clerk✓

Property Code § 53.254 sets out the whole checklist: (a) the person furnishing material or performing labor and the owner "must execute a written contract setting forth the terms of the agreement"; "(b) The contract must be executed before the material is furnished or the labor is performed"; "(c) If the owner is married, the contract must be signed by both spouses"; and "(e) The contract must be filed with the county clerk of the county in which the homestead is located." One spouse's signature is not enough on a homestead however the payment terms are arranged, and signing at any point before completion fails subsection (b), which fixes the moment as before the work rather than merely before the end of it. Notarising is the wrong formality: what § 53.254(f) requires of the affidavit is the conspicuous notice "NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN." Property Code § 41.001(b)(3) closes the circle by allowing an encumbrance on a homestead for work and material only "if contracted for in writing as provided by Sections 53.254(a), (b), and (c)."

A Texas property owners' association wants to foreclose its assessment lien. It may not do so where the debt consists solely of:

• a.Fines and the attorney's fees associated with those fines✓
• b.Regular annual assessments unpaid for more than two years
• c.Special assessments approved by a vote of the membership
• d.Transfer fees charged when the property last changed hands

Property Code § 209.009: "A property owners' association may not foreclose a property owners' association's assessment lien if the debt securing the lien consists solely of: (1) fines assessed by the association; (2) attorney's fees incurred by the association solely associated with fines assessed by the association; or (3) amounts added to the owner's account as an assessment under Section 209.005(i) or 209.0057(b-4)." The bar is drawn around fines, so unpaid assessments are outside it whether they are regular or special and however long they have gone unpaid; the word solely also means a debt mixing fines with real assessments is not protected. Transfer fees are not on the list either. Even where foreclosure is open to the association, § 209.0091 adds a prerequisite: written notice of the delinquency to any subordinate lienholder of record evidenced by a deed of trust, and an opportunity to cure "before the 61st day after the date the association mails the notice."

An unlicensed investor puts a Texas house under contract and then advertises the contract for assignment. Under the TREC rules he must:

• a.Obtain a real estate license before advertising the assignment
• b.Route the assignment through a licensed Texas real estate broker
• c.Disclose in writing the nature of his equitable interest✓
• d.Close on the purchase himself before he may assign the contract

22 TAC § 535.6(a): a person may acquire an option or enter into a contract to purchase real property "and then sell or offer to sell the option or assign or offer to assign the interest in the contract without having a real estate license if the person: does not use the option or contract to purchase to engage in real estate brokerage; and discloses in writing the nature of the equitable interest to any seller or potential buyer." Subsection (b) supplies the consequence and answers the first two options at once: a person who sells or assigns "without disclosing the nature of that interest as provided by subsection (a) of this section is engaging in real estate brokerage" — so neither a license nor a broker is required while the disclosure is made, and both become the problem the moment it is not. Nothing requires him to close first, because what he is marketing is the contract rather than the title; § 535.6(c) requires a license holder doing the same thing to disclose in writing that he "does not have legal title to the real property."

Lena, a Texas sales agent, meets Priya at a public open house on Saturday. Priya asks to see two more houses; Lena shows her both that afternoon and writes an offer on one of them on Sunday. Nothing has been signed between them. Which statement about Lena's weekend is correct?

• a.She complied: the offer was written within 48 hours of the showing
• b.She breached the written-agreement duty owed before any showing✓
• c.She complied: Priya never asked to be represented by anyone
• d.She breached only the IABS duty, which was owed at the open house

Two rules run through this weekend and only one of them is broken. The IABS notice is not owed at a public open house: Occupations Code § 1101.558(c)(3) removes the duty there, so Saturday is clean on that score and an answer resting on it is wrong at the first step. The written agreement is a different matter. Section 1101.563(b), effective 1 January 2026, requires a license holder performing any act of real estate brokerage for a prospective buyer of residential real property to "enter into a written agreement with the prospective buyer before: (1) showing any residential real property to the prospective buyer." The duty bit before the first of the two afternoon showings, not when the offer was written, so no 48-hour window saves it — § 1101.563(b)(2) makes the offer the trigger only "if no residential real property will be shown." Priya's silence about representation does not help either: § 1101.563(c)(1)(D) contemplates an agreement stating that the license holder does not represent the buyer, so an unrepresented buyer is a reason to choose a different form of agreement, not to sign none. Failing to enter into it is its own ground for discipline under § 1101.652(b)(34).

Marcus, a Texas broker, meets a buyer who refuses representation but wants to tour houses. Marcus signs him to a written showing-only agreement: exclusive to Marcus, running 30 days, naming the compensation. What makes the agreement non-compliant?

• a.The 30-day term only — a showing agreement may be exclusive
• b.Both the exclusivity and the term longer than fourteen days✓
• c.The exclusivity only — a showing agreement may run any length
• d.Neither, since the buyer declined representation in writing

Occupations Code § 1101.563(e) puts two separate limits on this one document: a written agreement "with a prospective buyer for showing real property under Section 1101.562 may not: (1) be an exclusive agreement with the license holder; or (2) state a termination date more than fourteen days from the date the agreement is entered into." Marcus's agreement fails both, so an answer naming only the term or only the exclusivity is half right and therefore wrong. The last answer confuses the two new sections with each other. Section 1101.562 creates a status — showing real property to a party without representing them — while § 1101.563 is what requires a writing and constrains it, and § 1101.563(b) makes that writing mandatory whether or not the buyer is represented. Declining representation is expressly provided for at § 1101.563(c)(1)(D)(ii), which contemplates an agreement stating that the license holder "does not represent the prospective buyer as the buyer's agent if the only act of real estate brokerage being performed is showing real property under Section 1101.562." Marcus would also need a separate agreement under § 1101.563(d) before doing anything beyond showing.

A Texas brokerage lists the Ortiz house; a buyer the same brokerage represents wants to bid. Both written agreements authorize intermediary status in conspicuous bold print. The broker authorizes Ana, the listing agent, to make the appointments. Ana appoints herself to the seller and a colleague to the buyer. What is wrong?

• a.Nothing is wrong; the broker may authorize any associate to appoint
• b.The brokerage must withdraw from one side of the transaction
• c.The parties' consent must be re-signed once appointments are made
• d.Ana may not appoint herself while holding appointing authority✓

The consents themselves are in order. Occupations Code § 1101.559(a)-(b) is satisfied because each party signed a written agreement authorizing intermediary status that specifies "in conspicuous bold or underlined print the conduct that is prohibited under Section 1101.651(d)," and § 1101.560(b) permits appointments where that consent authorizes the broker to make them and the broker gives written notice of the appointment to all parties. What fails is combining two roles in one person. TREC's published guidance states that where "the intermediary authorizes another license holder to appoint associated license holders to work with the respective principals, that license holder cannot designate himself/herself as one of the appointed license holders. This is an improper combination of the different functions of intermediary and appointed license holder." Withdrawal is not the remedy, because § 1101.561(b) obliges a broker who agrees to represent both a buyer and a seller to act as intermediary, and the appointment machinery exists so the firm can do exactly that. And nothing in § 1101.559 or § 1101.560 calls for the consents to be signed again afterwards — written notice of the appointment is what the statute requires, and there remains a single intermediary broker throughout.

On Friday at 4 p.m. a Texas sales agent takes a buyer's $5,000 earnest money check at the buyer's kitchen table. The brokerage office is closed on Saturday and Sunday. What does the TREC trust-money rule require?

• a.The agent deposits it into her own trust account by Tuesday's close
• b.The agent gives it to her broker at once; the broker's clock then runs✓
• c.The agent holds it until the seller accepts, and forwards it then
• d.The agent delivers it to the title company within three calendar days

Two provisions of 22 TAC § 535.146 stack here, and they put the duty and the deadline on different people. First, § 535.146(b)(2): "A sales agent shall not maintain a trust account. Any trust money received by a sales agent must be immediately delivered to the sales agent's sponsoring broker." That disposes of the agent keeping her own trust account and of her holding the check until the seller accepts — the delivery duty is immediate and does not wait on the contract, which is precisely why an unaccepted offer is no excuse. Second, the deadline attaches to the broker: § 535.146(b)(3) requires the money to be deposited in a trust account or delivered to an authorized escrow agent "not later than the close of business of the second working day after the date the broker receives the trust money," unless the principals agree otherwise in writing. That is a working-day count, so a fixed three-calendar-day answer states the wrong measure and, like the first answer, names the wrong person as the one on the clock.

A Texas broker owes $9,000 on a closed sale: $6,000 to her sponsored agent and $3,000 to an Oklahoma broker who referred the buyer and did no negotiating in Texas. The agent asks that her share go to the agent's own LLC, which holds no license and is not registered with TREC. What may the broker do?

• a.Pay the Oklahoma broker but not the agent's unregistered LLC✓
• b.Pay neither; a commission may go only to a Texas license holder
• c.Pay the LLC but not the Oklahoma broker, who is unlicensed here
• d.Pay both, since referral fees and entity payments are unrestricted

The two payments are governed by different sentences and only one of them clears. Occupations Code § 1101.651(a) lets a broker compensate "a real estate broker licensed in another state who does not conduct in this state any of the negotiations for which the commission or other compensation is paid" — which describes the Oklahoma referral exactly, and 22 TAC § 535.4(b) confirms the Act "does not prohibit cooperative arrangements between foreign brokers and Texas brokers." So a blanket Texas-only answer is wrong, and so is refusing that broker as unlicensed here, because being licensed elsewhere and negotiating nowhere in Texas is the whole of what the subdivision asks. The agent's company is the problem. Rule § 535.147(c) says a broker "may not share a commission or fees with an unlicensed business entity created by a license holder for the purpose of collecting a commission or fees on behalf of the license holder, unless the entity is exempted from the requirements of licensure as provided by § 535.5 of this chapter and § 1101.355(d) of the Act." Section 1101.355(d) exempts such an entity only where it is an LLC or S corporation, performs no other acts of a broker, is registered with the commission and is at least 51 percent owned by the license holder. This one is not registered, so the exemption is unavailable and nothing here is unrestricted.

A married Texas couple hire a contractor to add a room to their homestead. They sign a written contract on the second day of the work; only the husband signs it; nothing is filed with the county clerk. Unpaid, the contractor records a lien affidavit. Is the lien on the homestead good?

• a.Yes — the work was done, and the homestead exemption has limits
• b.Yes — recording the affidavit perfects the lien on any property
• c.No — but only because the wife did not sign the contract
• d.No — it fails on the signature, the timing and the filing✓

A homestead lien has to clear a checklist, and this contract misses three separate items on it. Property Code § 53.254(b): "The contract must be executed before the material is furnished or the labor is performed" — signing on the second day of work is too late. Subsection (c): "If the owner is married, the contract must be signed by both spouses" — the husband's signature alone is fatal. Subsection (e): "The contract must be filed with the county clerk of the county in which the homestead is located" — and nothing was filed. Any one of those would sink it, which is why naming only the missing signature is incomplete rather than merely brief. Recording the affidavit afterwards cures none of them; § 53.254(f) requires that affidavit to state conspicuously "NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN." And the homestead is not merely limited but exempt: § 41.001(a) exempts it "from seizure for the claims of creditors," allowing an encumbrance for work and material only "if contracted for in writing as provided by Sections 53.254(a), (b), and (c)."

A Texas contract on TREC No. 20-19 has an effective date of a Monday. Paragraph 5A names the escrow agent and states $2,000 earnest money, but the option-fee blank is left empty. Paragraph 5B says 7 days. The buyer delivers $2,000 on Wednesday and gives notice of termination on the Monday of the following week. The result is:

• a.The termination stands; the option period ran and notice was timely
• b.The termination stands, but the seller keeps the earnest money
• c.The termination fails; with no option fee stated, no right arose✓
• d.The termination fails; notice came one day outside the option period

The trap is that the buyer's timing works and still does not help her. The earnest money went in on Wednesday, inside the window paragraph 5A allows: "Within 3 days after the Effective Date, Buyer must deliver to [Escrow Agent] ... as earnest money and ... as the option fee." Notice on the Monday of the following week is the seventh day after the effective date, and paragraph 5B requires notice within the stated days after the effective date, given by 5:00 p.m. local time — so it is not late, and an answer resting on lateness misreads the count. What defeats her is paragraph 5D: "If no dollar amount is stated as the option fee or if Buyer fails to deliver the option fee within the time required, Buyer shall not have the unrestricted right to terminate this contract under this paragraph 5." An empty blank is no dollar amount, so the right never came into existence and a timely notice has nothing to exercise. The earnest-money answer describes what happens when a buyer terminates properly — paragraph 5B refunds the earnest money to the buyer and releases the option fee to the seller — which is the opposite allocation.

A Texas buyer signs on TREC No. 20-19 with paragraph 7B(2) checked and 10 days written in. The seller delivers the § 5.008 Seller's Disclosure Notice on day 12. The buyer reads it, does nothing for nine days, then tries to terminate. Closing is three weeks away. May she?

• a.Yes — the seller delivered late, so her right runs until closing
• b.Yes — the ten-day blank governs, and it has not yet expired
• c.No — her seven days after receiving the notice have run out✓
• d.No — the option period is the only route out of the contract

Paragraph 7B(2) sets out two different rights and this buyer has fallen between them. If the notice never arrives, "Buyer may terminate this contract at any time prior to the closing and the earnest money will be refunded to Buyer." But delivery replaces that with a shorter clock: the buyer "may terminate this contract for any reason within 7 days after Buyer receives the Seller's Disclosure Notice or prior to the closing, whichever first occurs." Property Code § 5.008(f) says the same at statute level. Nine days is outside seven, so the right is spent even though closing is weeks off — the seller's lateness bought her the seven days rather than an open-ended right, which is why the first answer states the rule for a case that is not this one. The ten-day blank measures the seller's delivery deadline, not the buyer's termination window, and the seller's overrun by two days is what triggered § 5.008(f) in the first place. The option period under paragraph 5B is a separate right; the disclosure-notice right stands on its own and would have worked had she used it in time.

A Texas sale on TREC No. 20-19 terminates. The buyer signs a release of earnest money; the seller refuses to sign anything. On 2 June the buyer makes written demand on the escrow agent, who copies it to the seller. The seller sends nothing. On 20 June the escrow agent asks what it may do.

• a.Nothing, until a court orders the money released to one party
• b.It may disburse to the buyer: no objection came within 15 days✓
• c.It must split the deposit evenly and then close its file
• d.It must hold the money until the seller signs a written release

Paragraph 18C of TREC No. 20-19 supplies the machinery. Either party or the escrow agent may send a release to each party, and "if either party fails to execute the release, either party may make a written demand to the Escrow Agent for the earnest money." The escrow agent promptly provides a copy of the demand to the other party, and "if Escrow Agent does not receive written objection to the demand from the other party within 15 days, Escrow Agent may disburse the earnest money to the party making demand reduced by the amount of unpaid expenses incurred on behalf of the party receiving the earnest money." Fifteen days from 2 June expires on 17 June with nothing filed, so by 20 June the route is open: no court order is needed, and the seller's signature has stopped being the gate the last answer assumes it is. Splitting the deposit is not a remedy the paragraph offers, and the escrow agent choosing an even split would be deciding a dispute it is expressly not a party to under paragraph 18A. The seller's silence is not free either — paragraph 18D makes a party "who wrongfully fails or refuses to sign a release acceptable to the Escrow Agent within 7 days of receipt of the request" liable for damages, the earnest money, reasonable attorney's fees and all costs of suit.

A buyer's agent in Texas wants the contract to let her client walk if the appraisal comes in low. She drafts a two-sentence clause and asks the listing agent to accept it in paragraph 11, Special Provisions, of TREC No. 20-19. What should she do instead?

• a.Put it in paragraph 11, since her client instructed her in writing
• b.Have the listing agent's broker approve the wording first
• c.Attach it as an amendment on TREC No. 39-11 after signing
• d.Use the promulgated addendum for termination on a low appraisal✓

The clause she has drafted is the very thing the rules name. 22 TAC § 537.11(b)(5) bars a license holder from "draft[ing] or recommend[ing] language to be included in a contract form defining or affecting the rights, obligations, or remedies of the principals of a real estate transaction, including escalation, appraisal, or contingency clauses." Paragraph 11 says the same on its face: it "is intended to be used only for additional informational items," and "real estate brokers and sales agents are prohibited from practicing law and shall not add to, delete, or modify any provision of this contract unless drafted by a party to this contract or a party's attorney." A written instruction from her client does not rescue it, because § 537.11(d)(2) lets a license holder add or strike language on written instruction, not compose a clause of her own and have it adopted; and the other broker's blessing changes nothing about who drafted it. TREC has already written a form for this problem: § 537.56 adopts standard contract form TREC No. 49-1, the Addendum Concerning Right to Terminate Due to Lender's Appraisal. An amendment on TREC No. 39-11 changes terms the parties have agreed; it is not a substitute for the addendum written for this contingency, and drafting the clause into an amendment would run into § 537.11(b)(5) all over again.