Texas Real Estate Sales Agent Exam practice questions
204 free questions with answers and explanations.
- 1.A self-employed borrower is applying for a conventional loan and has a fluctuating income. The lender is likely to request which of the following to verify their income stability and capacity to repay?Financing
- 2.A buyer is purchasing a home for $300,000 and is obtaining an 80% loan-to-value (LTV) mortgage. The lender charges a 1% loan origination fee and 2 discount points. What is the total amount the buyer will pay for the origination fee and discount points?Financing
- 3.A buyer is closing on a new home. The lender provides a document detailing all the costs associated with the loan, including the interest rate, monthly payment, and total closing costs, at least three business days before closing. What is this document called?Financing
- 4.A buyer is closing on a new home. The lender provides a document detailing all costs associated with the mortgage transaction, which must be provided to the borrower at least three business days before closing. What is this crucial disclosure document called?Financing
- 5.A homeowner is considering refinancing their mortgage. Their current loan has a fixed interest rate, but they are concerned about rising interest rates in the future. Which type of loan would allow them to convert their existing adjustable-rate mortgage (ARM) to a fixed-rate mortgage?Financing
- 6.A lender is preparing a loan for a borrower and must comply with the TILA-RESPA Integrated Disclosure (TRID) Rule. Which of the following scenarios would necessitate a new 3-day waiting period for the Closing Disclosure (CD)?Financing
- 7.A lender is evaluating a borrower's creditworthiness for a conventional loan. Which of the following would be considered a 'red flag' that could negatively impact the borrower's ability to obtain the loan?Financing
- 8.A buyer is pre-approved for a conventional loan but is concerned about the initial monthly payments. Which loan feature could help reduce their early payments by deferring a portion of the interest?Financing
- 9.A buyer is securing a loan for a new home purchase. The lender requires an appraisal to determine the property's market value. Which of the following is the PRIMARY purpose of this appraisal from the lender's perspective?Financing
- 10.A borrower is reviewing their loan estimate and notices several fees associated with the loan. Which of the following closing costs is typically paid by the borrower to the lender to lower the interest rate on the loan?Financing
- 11.A borrower is seeking a loan to purchase a single-family home. The lender is offering a loan where the interest rate can fluctuate over the life of the loan based on an economic index. What type of loan is this?Financing
- 12.A buyer is considering an assumable loan. Which of the following loan types is generally NOT assumable?Financing
- 13.A buyer is interested in purchasing a home with a low down payment and is comparing different loan options. They have excellent credit and are a veteran. Which type of loan is specifically designed to offer 100% financing (no down payment) to qualified veterans?Financing
- 14.A buyer is applying for an FHA loan. Which of the following statements about FHA loan requirements is FALSE?Financing
- 15.A lender is evaluating a borrower's ability to repay a loan. They consider the borrower's total monthly debt payments, including the proposed housing expense, in relation to their gross monthly income. This calculation is known as the back-end ratio. Which of the following is typically included in the 'total monthly debt payments' for this calculation?Financing
- 16.A real estate agent is explaining closing costs to a first-time homebuyer. The buyer asks about a fee paid to the lender, typically 0.5% to 1.5% of the loan amount, for the administrative costs of processing the loan application. What is this fee called?Financing
- 17.A borrower is seeking to purchase a property in a designated rural area and has a moderate income. They are informed that they may qualify for a loan that does not require a down payment and is backed by the U.S. government. Which government loan program is MOST likely being referred to?Financing
- 18.A tenant's lease agreement specifies that they are responsible for paying a fixed monthly rent, property taxes, and hazard insurance premiums. The landlord is responsible for structural repairs and common area maintenance. What type of lease is this?Contracts
- 19.A buyer's agent is assisting a client with the purchase of a home. The client signs a Buyer Representation Agreement, which includes a safety clause. The safety clause specifies a 90-day protection period. If the buyer terminates the agreement but then purchases a home shown to them by the agent during the original agreement term, and closes within the 90-day protection period, what is the agent's entitlement?Contracts
- 20.A buyer makes an offer on a property, and the seller counters. The buyer reviews the counteroffer and decides to accept it, but before the buyer communicates acceptance, the seller calls to withdraw the counteroffer. What is the status of the offer and counteroffer?Contracts
- 21.An agent is discussing the essential elements of a valid contract with a client. Which of the following is NOT considered an essential element for a contract to be legally enforceable?Contracts
- 22.A real estate agent is preparing a listing agreement for a seller. The seller expresses concern about paying a commission if they find a buyer on their own. To address this, the agent suggests an agreement where the seller retains the right to sell the property without paying a commission, but agrees to pay the agent if any other broker sells the property. This arrangement describes which type of listing?Contracts
- 23.A listing agent is preparing a listing agreement with a seller. The seller insists on a clause stating that the listing agent will receive a commission only if another broker, not the listing agent, procures the buyer. What type of listing agreement is the seller proposing?Contracts
- 24.A property manager enters into an agreement with an owner to manage a multi-family apartment complex. The agreement includes provisions for collecting rent, handling maintenance requests, and negotiating new leases on behalf of the owner. Which of the following best describes the property manager's agency relationship with the owner?Contracts
- 25.A buyer enters into a sales contract to purchase a home. The contract includes a contingency that the buyer must obtain financing within 21 days. If the buyer fails to secure financing within the specified timeframe, and the seller chooses to terminate the contract, what is the typical outcome regarding the earnest money?Contracts
- 26.A buyer enters into an option contract to purchase a commercial property for $500,000. The option fee is $5,000, and the option period is 60 days. If the buyer decides to exercise the option, how much credit will they typically receive towards the purchase price at closing?Contracts
- 27.A tenant is renting a commercial space under a lease agreement that states the rent will increase by 3% annually. What type of lease is this?Contracts
- 28.A buyer and seller have signed a TREC-promulgated One to Four Family Residential Contract (Resale). Before closing, the buyer discovers that the seller intentionally misrepresented the property's square footage. Which of the following statements is true regarding this contract?Contracts
- 29.A landlord and tenant verbally agree to a 10-month lease for an apartment. The tenant moves in and pays rent for two months. After the second month, the landlord decides to terminate the agreement, claiming it's not legally enforceable. Is the landlord correct, according to the Statute of Frauds?Contracts
- 30.A tenant has a one-year lease agreement for an apartment. Three months into the lease, the tenant's employer relocates them to another city. The tenant finds a new person to take over the remainder of the lease, and the landlord agrees to release the original tenant from all future liability, accepting the new person as the sole tenant. What legal action has occurred?Contracts
- 31.A buyer client is interested in a property listed by an agent with the same brokerage, making it an in-house transaction. The broker decides to act as an intermediary in this transaction. According to TRELA, what is the broker allowed to do in this intermediary relationship?Texas Real Estate Law
- 32.A seller accepts an offer on their home, and both parties sign a TREC One to Four Family Residential Contract (Resale). Before closing, a fire damages the property, rendering it uninhabitable. According to the contract, what is the most likely outcome regarding the sales agreement?Contracts
- 33.A tenant in Texas discovers a severe water leak in their apartment that is causing significant damage. They notify their landlord in writing, but after a reasonable time, the landlord has not made repairs. According to the Texas Property Code, what is the tenant NOT permitted to do?Texas Real Estate Law
- 34.A licensed real estate sales agent is approached by a client who wants to lease a commercial property. The client asks the agent to prepare a commercial lease agreement for a term of five years. Which of the following statements accurately reflects the sales agent's authority regarding this request under TREC Rules?Texas Real Estate Law
- 35.A real estate agent is preparing a listing agreement for a seller who is selling their primary residence. The seller wants to ensure they are protected from potential liability if a buyer is injured on the property during a showing. Which clause should the agent ensure is included in the listing agreement to address this concern?Contracts
- 36.A property manager enters into a property management agreement with an owner. The agreement specifies that the manager will receive a management fee of 8% of the gross monthly rents collected. Additionally, the manager is authorized to negotiate and sign new leases for a flat fee of $200 per lease and handle minor repairs up to $500 without prior owner approval. What type of agent is this property manager acting as for the owner?Contracts
- 37.A real estate sales agent is approached by a client who wants to purchase a property 'for investment' and asks the agent to find a property that is likely to appreciate significantly in the next year. The agent, without being a licensed financial advisor, enthusiastically recommends a specific property, stating it's 'guaranteed' to double in value. Which of the following ethical duties has the agent violated?Texas Real Estate Law
- 38.A licensed real estate sales agent is preparing to list a residential property for sale. The agent discovers that the property was built in 1972. According to federal and state regulations, which of the following disclosures is most critical for the agent to ensure is provided to potential buyers?Texas Real Estate Law
- 39.A sales agent is found by TREC to have neglected to disclose a known material defect to a buyer, a violation of TRELA. Which of the following enforcement actions is TREC LEAST likely to impose as a primary penalty for this type of violation?Texas Real Estate Law
- 40.A buyer's agent is assisting a client with the purchase of a property that is part of a Property Owners' Association (POA). The buyer is concerned about the financial health of the POA and any restrictions on the property. What document is CRITICAL for the agent to ensure the buyer receives to address these concerns?Texas Real Estate Law
- 41.A licensed real estate sales agent is experiencing a dispute with their sponsoring broker over earned commissions. The sales agent believes the broker is wrongfully withholding payment. Which of the following is the MOST appropriate recourse for the sales agent to resolve this dispute?Texas Real Estate Law
- 42.A buyer submits an offer on a property. The seller makes a counteroffer, changing the closing date and adding a contingency for the sale of their current home. What is the legal status of the buyer's original offer?Texas Real Estate Law
- 43.A buyer makes a written offer to purchase a property for $350,000. The seller receives the offer and responds with a counteroffer, proposing a price of $360,000 and different closing costs. Before the buyer has a chance to respond to the counteroffer, the seller receives a full-price, all-cash offer from another party and decides to accept it. What is the status of the first buyer's original offer and the seller's counteroffer?Contracts
- 44.A real estate sales agent is managing a residential property for an owner. The tenant reports a serious issue with the air conditioning system, making the property uninhabitable during the summer. The landlord, despite receiving proper notice, has failed to make repairs within a reasonable time. According to Texas law, which of the following actions can the tenant legally take?Texas Real Estate Law
- 45.A real estate sales agent, sponsored by a broker, receives a referral fee from a mortgage lender for referring a client who successfully closed on a loan. The agent did not disclose this referral fee to the client. Which of the following is true regarding this situation under TREC Rules and RESPA?Texas Real Estate Law
- 46.A buyer's agent is assisting a client with the purchase of a residential property in a community that is part of a mandatory homeowners' association (HOA). Which of the following is the MOST crucial document that the buyer's agent should ensure the buyer receives and reviews regarding the HOA?Texas Real Estate Law
- 47.A buyer's agent, representing a client interested in a residential property, discovers that the seller has not provided a Seller's Disclosure Notice. The property is a foreclosure being sold by a bank. Which of the following statements is true regarding the Seller's Disclosure Notice in this scenario?Texas Real Estate Law
- 48.A real estate broker operating in Texas wants to open a branch office. According to TREC Rules, which of the following is REQUIRED for the branch office?Texas Real Estate Law
- 49.A real estate sales agent is preparing an advertisement for a property listed for sale. According to TREC advertising rules, which of the following information is REQUIRED to be included in the advertisement?Texas Real Estate Law
- 50.A tenant is leasing a retail space under an agreement where the rent is calculated as a base amount plus a percentage of the tenant's gross sales above a certain threshold. What type of lease is this?Contracts