Texas Real Estate Practice Questions

The earnest money and option fee must be delivered within three calendar days after contract execution.

The Effective Date is the date on which the last party signs the contract and communicates acceptance to the other party.

If the buyer fails to deposit earnest money within 3 calendar days, the seller may terminate the contract at any time before the money is actually received.

Once deposited, earnest money belongs to neither party; it is held in trust by the neutral escrow agent until closing or default.

Steering is the practice of directing buyers toward or away from specific neighborhoods based on their protected class status.

An unconscionable action is one that takes advantage of a consumer's lack of knowledge, ability, or experience to a grossly unfair degree.

Redlining is the discriminatory practice by lenders of refusing to make loans in specific geographic areas based on demographics rather than qualifications.

Blockbusting is panic peddling—inducing homeowners to sell their properties by claiming that a protected class is moving into the neighborhood.

The DTPA protects consumers against false, misleading, or deceptive business practices, unconscionable actions, and breaches of warranty.

No, a sales agent may not draft custom clauses or make substantive alterations that change legal rights.

No, TREC does NOT publish or promulgate listing agreements.

The Option Period duration is negotiable, but it strictly ends at 5:00 PM local time on the last day of the option period.

The unauthorized practice of law can result in license suspension, revocation, and class A misdemeanor charges.

Yes, Texas is a community property state where all property acquired during marriage is presumed to belong to both spouses.

Texas homesteads are limited to 10 acres for an urban homestead, and up to 100 acres (single person) or 200 acres (family) for a rural homestead.

A homestead is an owner-occupied primary residence protected from forced sale by most general creditors.

An easement is a legal right to use another's land, while an encroachment is an unauthorized physical intrusion.

No, dual agency is strictly illegal in Texas; brokers must use the statutory Intermediary Relationship instead.

Substantive dialogue is any meeting or communication involving specific real property.

An intermediary relationship is the legal mechanism allowing a single broker to represent both buyer and seller.

The IABS form is a mandatory written disclosure that explains how real estate representation works in Texas.

A broker can act as an intermediary only when they represent both parties in writing.

The IABS form must be provided at the first substantive dialogue concerning a specific real property.

No, a Texas sales agent can only be sponsored by one active licensed broker at any given time.

No, a Texas broker is strictly prohibited from paying a referral fee or commission to any unlicensed person.

A broker may give a referral gift of merchandise worth up to $50, but cannot pay cash or cash equivalents to an unlicensed person.

No, a Texas broker cannot pay a commission or referral fee to an unlicensed person for performing acts of brokerage.

No, an unlicensed assistant may not host an open house alone in Texas.

The Texas State portion is notoriously harder because it tests highly specific statutory rules, TRELA details, and strict timelines.

TREC consists of exactly nine members appointed by the Governor.

Yes, the National and Texas State portions are graded and scored as two entirely separate exams.

An unlicensed assistant in Texas can perform administrative tasks such as answering phones, typing forms, and scheduling appointments, but cannot negotiate or engage in brokerage activities.

You must score 70% on each of the separate National and State portions independently.

Engaging in unlicensed real estate activity is a Class A misdemeanor, punishable by a fine of up to $4,000 and/or up to one year in jail.

The Recovery Trust Account reimburses consumers who suffer financial losses due to illegal acts by real estate license holders, capped at $50,000 per transaction.

The National portion covers general real estate principles, while the State portion tests Texas-specific laws and TREC rules.

The Governor of Texas appoints all nine members of TREC with the advice and consent of the State Senate.

Only the sponsoring broker has the legal right to sue a client for a commission; sales agents cannot sue clients directly.