Texas Real Estate Broker Exam — All Questions

A Texas broker holding a buyer's earnest-money deposit must:

• a.Deposit it into the brokerage operating account to earn interest for the firm
• b.Keep it separate from the broker's own funds and not commingle or convert it✓
• c.Give it to the seller immediately
• d.Divide it with the sponsored agent as commission

A broker who holds client money such as earnest money must keep it separate from the broker's own funds and must not commingle or convert it. The money must be accounted for and disbursed only as the transaction and the parties' agreement allow. When a deposit is disputed, the broker acts as a neutral stakeholder and should not release it unilaterally.

Under Texas advertising rules, a sponsored sales agent generally must:

• a.Advertise as an independent business separate from the broker
• b.Avoid identifying any broker in ads
• c.Advertise under the sponsoring broker's name, with truthful, non-misleading content✓
• d.Only advertise on television

Texas advertising rules require truthful, non-misleading advertising that clearly identifies the broker. A sponsored sales agent generally must advertise under the sponsoring broker's name and may not imply that the agent operates independently of the broker. The broker is responsible for the firm's advertising, including that of sponsored agents.

Compared with the Texas sales agent exam, the broker exam places greater emphasis on office-management topics such as trust handling, advertising, and supervision because a broker:

• a.Is accountable for the firm's trust money, advertising, and the conduct of sponsored agents✓
• b.Never handles client money
• c.Cannot sponsor other license holders
• d.Is exempt from recordkeeping requirements

A broker is accountable for the firm's handling of trust money, its advertising, its records, and the conduct of the sales agents the broker sponsors. Because of this greater responsibility, the broker exam tests office-management and supervision topics more heavily than the sales agent exam. Good records and clear written policies protect both consumers and the broker.