Free Texas Real Estate Exam Flashcards

The state agency that licenses and regulates Texas real estate brokers, sales agents, inspectors, and education providers under TRELA and TREC rules.

The Texas Real Estate License Act. It defines who must be licensed, license exemptions, prohibited conduct, disciplinary powers, and penalties for unlicensed activity.

TREC has nine governor-appointed members: six licensed broker members and three public members. Members serve staggered six-year terms.

TREC may impose an administrative penalty up to $5,000 per violation, along with other discipline such as reprimand, suspension, revocation, or probation.

A TREC fund that may compensate consumers for actual damages caused by a license holder after the consumer obtains an unpaid court judgment.

The recovery fund limit is commonly tested as $50,000 per transaction and $100,000 per license holder. Payment from the fund causes automatic license revocation.

Applicants complete 180 classroom hours: Principles I, Principles II, Law of Agency, Law of Contracts, Promulgated Contract Forms, and Real Estate Finance.

An applicant must be at least 18, be a U.S. citizen or lawfully admitted alien, satisfy TREC honesty and integrity standards, complete education, and pass the background check.

A request an applicant may make before applying so TREC can review whether criminal history or other conduct could affect license eligibility.

After requirements are met, TREC issues an inactive sales agent license. The agent cannot work until an active Texas broker sponsors the license.

The active Texas broker who sponsors a sales agent, supervises the agent's real estate services, and is responsible for proper brokerage activity.

A Texas sales agent may not collect commission directly from a client. Compensation must flow through the sponsoring broker.

During any gap between sponsors, the sales agent's license is inactive and the agent cannot perform real estate services for compensation.

Texas brokers must maintain written policies and procedures for supervising agents, handling trust funds, advertising, document retention, and complaints.

The broker, not an individual sales agent, is responsible for proper handling of client funds such as earnest money held in a trust account.

Texas real estate sales agent licenses renew every two years, and renewal requires current TREC education and fee compliance.

Texas sales agents complete 18 CE hours per two-year cycle: Legal Update I, Legal Update II, and elective hours.

Additional education required for newly licensed Texas sales agents before their first renewal. It is separate from later continuing education.

Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable Care. These duties frame a Texas agent's obligations to a client.

A client is represented and owed fiduciary duties. A customer is not represented but must still be treated honestly and fairly.

Information About Brokerage Services. It discloses brokerage relationship options and must be given at first substantive dialogue about a specific property.

A specific conversation about a party's real estate needs, motivations, or transaction details. It triggers the IABS delivery requirement.

A broker represents both buyer and seller in the same transaction only with written consent from both parties and required statutory disclosures.

The broker remains neutral and cannot give opinions or advice favoring one party over the other. Confidential information remains protected.

The broker appoints different license holders to communicate with and advise each party, while the broker still acts as intermediary.

Texas brokers generally need a written listing or buyer representation agreement to establish agency duties and protect the right to compensation.

A safety clause that may preserve a broker's commission claim after a representation agreement expires for buyers or prospects the broker procured.

Standardized real estate contract forms created for required use by Texas license holders when an appropriate promulgated form exists.

The committee that drafts and revises TREC contract forms. It is commonly tested as six brokers and six attorneys.

They may fill blanks, check boxes, add factual business details, and attach proper addenda. They may not draft legal provisions.

A license holder risks TRELA discipline by drafting legal clauses or modifying contract rights instead of using promulgated forms or referring parties to counsel.

The common TREC resale contract for one-to-four family residential property. It organizes key terms such as parties, property, price, financing, earnest money, and closing.

A negotiated period giving the buyer an unrestricted right to terminate by timely written notice, supported by the option fee.

Consideration paid for the buyer's unrestricted termination right during the option period. It is treated separately from earnest money.

The place for factual statements and business details that do not belong elsewhere. It is not a place for a license holder to write legal terms.

Used when the buyer's purchase depends on third-party loan approval, such as conventional, FHA, or VA financing.

Used when the property is subject to mandatory membership in an owners' association, so HOA-related rights and costs are addressed in the contract.

An addendum supplements the original contract for a specific issue. An amendment changes terms after the contract already exists and requires agreement of the parties.

The title company does not decide who gets disputed earnest money. Release usually requires party agreement, mediation, court action, or interpleader.

A Texas Property Code disclosure for many residential sales. It covers known property condition items, but it does not replace an agent's duty to disclose known material facts.

Common exemptions include foreclosure, estate, and some new construction transfers. The exact exemption should be checked against the current Property Code.

A federal disclosure required for most housing built before 1978. It is separate from Texas-specific seller disclosure duties.

The Deceptive Trade Practices Act protects consumers against false, misleading, deceptive, and unconscionable conduct, including in real estate transactions.

Actual damages are available for violations. Knowing or intentional conduct can allow up to three times actual damages, and attorney's fees may be awarded to a prevailing consumer.

A DTPA waiver is narrow. The consumer must be represented by their own attorney, and the attorney must separately sign the waiver.

Homestead law protects a qualifying home from most creditor claims. The protection is automatic and does not require filing a declaration.

Texas homestead limits are commonly tested as 10 acres for an urban homestead, 200 rural acres for a family, and 100 rural acres for a single adult.

Common exceptions include purchase money liens, property taxes, qualifying home equity loans, and mechanic's liens for improvements.

Property acquired during marriage is presumed community property. Separate property includes premarital property, gifts, inheritance, and qualifying personal injury recoveries.

A landlord generally must return the deposit or provide itemized deductions within 30 days after surrender, once the tenant provides a forwarding address.