Texas Real Estate Sales Agent Practice Test

Sample practice questions

A few real questions from this free bank, with full explanations. Use the practice tool above for the whole set.

1. 1. Principles of Real Estate

   Which state agency licenses and regulates real estate sales agents and brokers in Texas?

   • a.The Texas Real Estate Commission (TREC)
   • b.The Texas Department of Housing and Community Affairs
   • c.The Texas Association of Realtors (TAR)
   • d.The Texas Real Estate Research Center

   Answer: a

   Explanation: TREC is the state agency created to administer the Real Estate License Act and regulate license holders. Private trade groups such as the Texas Association of Realtors set membership rules but do not issue licenses. Specifics of TREC rules can change over time.

2. 2. Agency & Law

   An agent must present to the seller:

   • a.Only offers at or above the list price
   • b.Only offers from pre-approved buyers
   • c.All written offers received, even low ones, unless the seller instructs otherwise in writing
   • d.Only the highest offer received

   Answer: c

   Explanation: The duty of disclosure and diligence generally requires presenting all written offers to the seller promptly so the seller can decide. A seller may waive this in writing, but the agent cannot unilaterally screen out offers.

3. 3. Finance

   The Real Estate Settlement Procedures Act (RESPA) primarily regulates:

   • a.Zoning of residential neighborhoods
   • b.Closing (settlement) cost disclosures and prohibits kickbacks
   • c.The design of TREC contract forms
   • d.Property tax assessment methods

   Answer: b

   Explanation: RESPA governs the disclosure of settlement costs on federally related mortgage loans and prohibits kickbacks and unearned referral fees. It works alongside TILA, which addresses the cost of credit.

4. 4. Principles of Real Estate

   A legal description that identifies a parcel by starting at a point of beginning and following directions and distances around the boundary is known as the:

   • a.Lot and block system used in recorded subdivision plats
   • b.Rectangular (government) survey system of ranges and townships
   • c.Metes and bounds description
   • d.Street address and tax parcel identification number

   Answer: c

   Explanation: Metes and bounds describes land by measured distances (metes) and directional boundaries (bounds), beginning and ending at a defined point of beginning. Texas relies heavily on metes and bounds and original land-grant abstracts rather than the rectangular survey system used in many other states.

5. 5. Principles of Real Estate

   A private deed restriction limits building height to two stories, but the zoning ordinance allows three. Which controls?

   • a.The owner may freely choose whichever limit is more convenient
   • b.Neither rule applies because the two limits cancel each other out
   • c.The zoning ordinance always overrides any private deed restriction
   • d.The more restrictive limit generally controls, so the two-story limit applies

   Answer: d

   Explanation: When private deed restrictions and public zoning both apply, the more restrictive of the two normally governs. Here the two-story deed restriction is stricter than the three-story zoning, so it controls.

6. 6. Agency & Law

   A seller instructs the listing agent not to show the home to families with children. The agent should:

   • a.quietly comply in order to keep the client satisfied
   • b.show the home only to prospective buyers without children
   • c.refuse, because complying would violate fair housing law
   • d.raise the asking price to discourage families from applying

   Answer: c

   Explanation: Refusing to show or sell to families with children is discrimination based on familial status. An agent may not follow an unlawful instruction, and doing so would expose both the agent and the seller to liability.

7. 7. Property & Ownership

   Under the Texas Property Code, a residential landlord generally must:

   • a.make a diligent effort to repair conditions that materially affect health or safety after proper notice
   • b.renovate the entire unit every single year regardless of condition unless the parties specifically negotiate a written exception beforehand
   • c.pay all of the tenant's monthly utility bills for them
   • d.provide free cable television service to every tenant

   Answer: a

   Explanation: Texas landlords have a statutory duty to make a diligent effort to repair conditions that materially affect the physical health or safety of an ordinary tenant, once the tenant gives proper notice and is not delinquent in rent.

8. 8. Contracts

   The clause in a deed that defines the extent of the ownership interest being conveyed, such as 'to have and to hold,' is the:

   • a.Defeasance clause, which cancels a lien once the underlying debt is paid
   • b.Acceleration clause, which lets a lender demand the full balance on default
   • c.Habendum clause
   • d.Subordination clause, which changes the priority order of competing liens

   Answer: c

   Explanation: The habendum clause, beginning 'to have and to hold,' describes the extent and type of ownership interest granted. Acceleration, defeasance, and subordination clauses are features of financing instruments, not the granting portion of a deed.

9. 9. Finance

   In an adjustable-rate mortgage, the 'index' is:

   • a.The one-time fee the borrower pays the lender to originate the loan
   • b.The fixed percentage the lender adds on top of the base rate as its profit
   • c.A published benchmark interest rate, such as SOFR, that moves with the market
   • d.The maximum interest rate the loan can ever reach over its full term

   Answer: c

   Explanation: The index is a published market benchmark, such as SOFR, to which the ARM's rate is tied. The lender adds a fixed margin to the index to determine the fully indexed rate at each adjustment.

10. 10. Real Estate Math

    Annual property taxes are $3,600, paid in arrears. Using a 360-day (12 equal months) proration and a closing on September 1, what is the seller's share for the portion of the year already owned (January 1 through September 1)?

    • a.$1,200 for the seller, covering the final four months of the tax year
    • b.$3,600
    • c.$300
    • d.$2,400

    Answer: d

    Explanation: From January 1 to September 1 is 8 months. The seller's share is $3,600 x 8/12 = $2,400, the amount the seller owed while owning the property in a taxes-in-arrears state.