1. A home sells for $520,000 with a 5% commission. The listing broker pays 2.5% to the buyer's broker and splits the listing side 60/40 with the listing salesperson (salesperson gets 60%). How much does the listing salesperson earn?
Answer & explanation
Answer: C. Total = $520,000 x 0.05 = $26,000. Buyer broker gets 2.5% = $13,000, leaving $13,000 for the listing side. Salesperson = $13,000 x 0.60 = $7,800.
2. A license holder pays a $500 referral fee to an unlicensed friend who sent a buyer. What is the most accurate description?
Answer & explanation
Answer: C. Paying a commission or compensation for brokerage activity to an unlicensed person violates §1101.651(a) and is a ground for discipline.
3. What is the maximum the Recovery Trust Account will pay on judgments against a single license holder?
Answer & explanation
Answer: B. §1101.610(b) limits payments based on judgments against one license holder to $250,000 until the license holder reimburses the account.
4. When must a Texas license holder provide the Information About Brokerage Services notice?
Answer & explanation
Answer: A. §1101.558(b-1) ties the written notice to the first substantive communication about specific property. Waiting until an agreement is signed is too late.
5. Under the Truth in Lending Act (Regulation Z), which phrase in an ad is a 'trigger term' requiring full credit disclosures?
Answer & explanation
Answer: A. Specific terms like the down payment amount, number or amount of payments, finance charge or repayment period trigger full disclosure (including APR). General statements do not.
6. A sales agent meets a buyer whom the agent knows is represented by another license holder. Must the agent provide the IABS to that buyer?
Answer & explanation
Answer: D. §1101.558(c)(2) excuses the IABS when the license holder meets with a party the license holder knows is represented by another license holder. Brokerage affiliation does not matter.
7. Which statement about dual agency is correct?
Answer & explanation
Answer: D. Dual agency creates an inherent conflict; with informed written consent, the agent provides limited representation and must keep each party's confidences.
8. TREC pays a claim from the Recovery Trust Account on behalf of a license holder, who does not repay. What happens?
Answer & explanation
Answer: B. §1101.655 requires revocation if the license holder fails to repay in full before the 31st day after TREC's notice. The person is not eligible for a license until the amount is repaid in full plus interest.
9. Which activity may an unlicensed assistant generally perform?
Answer & explanation
Answer: D. Unlicensed staff may perform clerical tasks like typing licensee-prepared ads, but may not compose ads, negotiate or show property.
10. Which state agency enforces the Texas Fair Housing Act?
Answer & explanation
Answer: C. TWC's Civil Rights Division investigates and enforces Texas Fair Housing Act complaints. TREC separately disciplines licensees for discrimination.
11. From whom may a Texas sales agent accept compensation for a real estate transaction?
Answer & explanation
Answer: B. §1101.651(b) limits a sales agent's compensation to the sponsoring broker or the broker who sponsored the agent when the compensation was earned.
12. Which person may negotiate the sale of real property for another without a Texas real estate license?
Answer & explanation
Answer: A. Persons acting under a court order or authority, such as executors, are exempt. The attorney exemption covers only attorneys licensed in Texas. A sales agent without a sponsor holds an inactive license and cannot act.
13. TREC finds that a licensee violated TRELA every day for 4 days. What is the maximum total administrative penalty TREC could impose if each day is treated as a separate violation?
Answer & explanation
Answer: B. The cap is $5,000 per violation, and each day a violation continues may be treated as a separate violation. Total: 4 days x $5,000 = $20,000. $5,000 assumes a single violation.
14. Effective January 1, 2026, when must a license holder working with a residential buyer enter into a written agreement with that buyer?
Answer & explanation
Answer: A. SB 1968 added §1101.563, which requires the written agreement before showing residential property, or before presenting an offer if nothing is shown.
15. On a closing statement, the purchase price is a:
Answer & explanation
Answer: B. The seller receives the price (credit); the buyer owes it (debit).
16. Mixing client trust funds with the broker's own business funds is:
Answer & explanation
Answer: B. Commingling client/escrow funds with the broker's operating funds is prohibited and grounds for discipline. Using those funds for personal purposes is conversion.
17. A listing where the seller may sell themselves without owing commission, but only the listing broker among agents is protected, is:
Answer & explanation
Answer: B. In an exclusive agency listing, the seller pays no commission on a self-sale, but the listing broker is protected if any broker sells it. (Reclassified to section 6 / CORE.)
18. A broker received a 4.2% commission totaling $12,600. What was the sale price?
Answer & explanation
Answer: C. Sale price = commission / rate = $12,600 / 0.042 = $300,000.
19. A licensee never signs a buyer agreement but repeatedly gives a buyer negotiating advice and acts on his behalf. An agency relationship may have been created by:
Answer & explanation
Answer: A. Implied agency arises from conduct; the agent then owes full fiduciary duties. Express agency is created by stated agreement, ideally in writing.
20. Under the Code of Ethics, commission disputes between REALTORS associated with different firms are generally resolved through:
Answer & explanation
Answer: B. Article 17 requires REALTORS to mediate or arbitrate contractual and specific non-contractual disputes with other REALTORS through the association.
21. A broker earned a $15,750 commission on a $450,000 sale. What was the commission rate?
Answer & explanation
Answer: A. Rate = commission / sale price = $15,750 / $450,000 = 0.035 = 3.5%.
22. When an owner dies with no will and no heirs, the property passes to the state through:
Answer & explanation
Answer: C. Escheat transfers ownerless property to the state when there is no will and no heirs.
23. Which statement about FHA-insured loans is correct?
Answer & explanation
Answer: C. FHA loans are made by approved lenders and insured by FHA, with down payments as low as 3.5% and mortgage insurance premium (MIP) required on all FHA loans, for 1-4 family homes.
24. A seller wants to net $250,000 after paying a 6% commission and $6,000 in other closing costs. To the nearest dollar, what must the sale price be?
Answer & explanation
Answer: B. Net + other costs = $256,000, which equals 94% of the price (100% - 6%). Price = $256,000 / 0.94 = $272,340.43, about $272,340. Adding 6% to $256,000 ($271,360) understates the price.
25. In real estate, the accessibility requirements of the Americans with Disabilities Act apply mainly to:
Answer & explanation
Answer: A. The ADA's accessibility rules primarily cover public accommodations and commercial facilities; housing accessibility is governed mainly by the Fair Housing Act.
Sources
Source verification pending. Confirm current requirements with your state regulator.