This free Texas real estate exam study guide prepares you for the Texas Real Estate Commission (TREC) sales agent licensing exam — both the national (general) portion and the Texas state-law portion, taken in one session through Pearson VUE.[1] Texas real estate is governed by the , Chapter 1101 of the Texas Occupations Code.[2]
It’s organized into nine modules: Module 0 covers the Texas-specific law that fills the 40-question state portion — , education and sponsorship, the notice, , and — and Modules 1–8 cover the eight national content areas. Every module is interactive: a built-in checkpoint quiz, hover-able glossary terms, worked math examples, and concept questions.
Read it module by module, test yourself at each checkpoint, then round out your free prep with our Texas practice questions and flashcards. The two areas that reward the most study time are Texas license law & agency (the state portion) and contracts and agency on the national side.
Texas Real Estate Exam Snapshot
| Detail | Texas sales agent exam |
|---|---|
| Regulator | Texas Real Estate Commission (TREC), under TRELA (Occupations Code Ch. 1101) |
| Pre-license education | 180 hours — six 30-hour TREC courses (Principles I & II, Law of Agency, Law of Contracts, Promulgated Contract Forms, Real Estate Finance) |
| Exam portions | National (general): 85 scored questions · Texas state: 40 scored questions — taken in one session |
| Passing standard | Both portions separately — about 70% each (national 56/80, state 21/30 scored) |
| Testing provider | Pearson VUE |
| Activation | License is inactive until a licensed Texas broker sponsors the agent |
| Continuing education | 18 hours every 2 years — Legal Update I (4) + Legal Update II (4) + contracts (3) + electives (7) |
| Fees | Application and exam fees plus fingerprint/background-check costs (confirm current amounts on the TREC fee schedule) |
The exact question count, passing score, and fees are set by TREC and Pearson VUE and can change, so confirm the current numbers for your exam.[1] The weighting below reflects the Texas blueprint — the 40-question state portion is the single biggest block, and on the national side contracts and agency leads:
Exact weights can shift with TREC’s blueprint, so treat these as a planning guide.[1] This guide teaches the Texas state portion as Module 0 and the eight national content areas as Modules 1–8, each ending in a checkpoint quiz.
0 · Texas License Law, TREC & Agency
The entire 40-question state portion. This is what makes the Texas exam Texas — the regulator, how you get and keep a license, and the Texas-specific agency rules (IABS, intermediary brokerage, and promulgated forms).[2]
TREC & TRELA — the Texas Regulator
The licenses and regulates Texas brokers and sales agents under (Texas Occupations Code Chapter 1101).[2] TREC has nine membersappointed by the Governor — six brokers and three members of the public — and adopts rules in Title 22 of the Texas Administrative Code. Don’t confuse TREC with the Texas Association of Realtors (a private trade group).
Education, Licensing & Sponsorship
To be licensed, an applicant must be at least 18, meet TREC’s honesty, trustworthiness, and integrity standards, complete 180 hours of qualifying education, pass the exam and a background check, and find a sponsoring broker.[1]
TREC requires 180 classroom hours of qualifying education before a sales-agent applicant may be licensed — six TREC-approved 30-hour courses.
6 courses × 30 hours = 180 hours of TREC-approved qualifying education.
- 1 · Meet eligibility & file the applicationBe 18+, a U.S. citizen or lawfully admitted alien, a Texas resident, and meet TREC's honesty, trustworthiness & integrity standards (a Fitness Determination can be requested first).
- 2 · Complete 180 hours of qualifying educationSix TREC-approved 30-hour courses, including Principles I & II, Law of Agency, Law of Contracts, Promulgated Contract Forms, and Real Estate Finance.
- 3 · Pass the licensing exam & background checkPass the Pearson VUE exam (national + Texas state portions) and submit fingerprints for the FBI/DPS background check.
- 4 · Find a sponsoring broker to activate the licenseA sales agent license is INACTIVE until a licensed Texas broker sponsors the agent. A sales agent may only act for and be paid by the sponsoring broker.
A Texas sales agent must always work under and through a sponsoring broker — never independently.
IABS & Intermediary Brokerage
Two Texas agency rules show up again and again. First, the (TREC No. IABS 1-0) must be given at the first substantive communication with a party about a specific property (TRELA Sec. 1101.558).
- 1 · First substantive communicationThe license holder begins discussing a specific property or a possible transaction with a party (buyer, seller, tenant, or landlord).
- 2 · Provide the IABS notice (TREC No. IABS 1-0)At that first substantive communication, the license holder must give the party the written Information About Brokerage Services notice — by hand, mail, email, or fax.
- 3 · Notice explains broker rolesThe IABS describes what a broker for the buyer/tenant, a broker for the seller/landlord, and an intermediary do — and that a license holder must put the client's interests first.
Exception: the IABS is not required for a transaction that is solely a residential lease of one year or less with no sale contemplated, or with a party already represented by another license holder.
Second, Texas abolished common-law dual agency. When one firm represents both sides, the — only with each party’s written consent stating who pays the broker (TRELA Sec. 1101.559).
Texas abolished common-law dual agency. When one brokerage represents both buyer and seller, it must use the statutory intermediary relationship (TRELA Sec. 1101.559–1101.561) instead.
In Texas the brokeris the intermediary; appointed agents may advise “their” party, but the firm must remain impartial.
Promulgated Forms & Disclosures
TREC standard contract forms that license holders must use. The (six brokers and six attorneys) drafts them, and the most common is the One to Four Family Residential Contract (Resale), TREC No. 20-18.
- 1 · Broker-Lawyer Committee drafts a formSix brokers (appointed by TREC) and six attorneys (appointed by the State Bar) draft and revise the standard forms (TRELA Sec. 1101.155).
- 2 · TREC adopts (promulgates) the formThe Commission adopts the form by rule. Once promulgated, license holders MUST use it for the transactions it covers.
- 3 · License holders fill in the blanks onlyAgents may complete factual blanks but may NOT draft contract language or add provisions — that is the unauthorized practice of law.
The most-used promulgated form is the One to Four Family Residential Contract (Resale) — TREC No. 20-18.
Texas also requires a seller of a single residential dwelling to give the buyer a under Property Code Sec. 5.008, covering known defects and issues such as flooding and 100-year floodplain status.[3]
Checkpoint · Module 0 · Texas License Law, TREC & Agency
Question 1 of 10
Which Texas agency administers and enforces the Texas Real Estate License Act (TRELA) and licenses real estate sales agents?
1 · Property, Legal Descriptions & Land Use
About 13% of the national portion.What real property is, the estates and rights an owner can hold, the encumbrances that limit them, the government’s powers over land, and how land is legally described.[8]
Estates & the Bundle of Rights
is land, everything permanently attached to it (including ), and the of ownership. The largest estate is — absolute and inheritable. A lasts only for someone’s lifetime, so it can’t be willed. Leasehold estates give a tenant the right to use property without owning it.
Encumbrances & Easements
An is anything that limits title. An is a nonpossessory right to use another’s land; an is an unauthorized intrusion onto a neighbor’s land. A lien is a money claim against the property.
| Encumbrance | What it is |
|---|---|
| Easement appurtenant | A use right that benefits an adjacent parcel and runs with the land |
| Easement in gross | A use right that benefits a person or company (e.g., a utility), not a parcel |
| Lien | A monetary claim securing a debt — can force a sale if unpaid |
| Encroachment | An improvement intruding onto a neighbor's land; found by survey |
| Deed restriction (CC&Rs) | Private limits on use, often stricter than zoning |
Government Powers & Land-Use Controls
Even fee simple is limited by four government powers, remembered as PETE: Police power, Eminent domain, Taxation, and Escheat. Local governments use for zoning and building codes; takes land for public use with just compensation, and only it pays the owner.
Legal Descriptions
Three methods describe land precisely: (distances and bearings from a point of beginning), the rectangular (government) survey system (townships, ranges, and ), and lot-and-block (a recorded plat). Know that one is 640 acres and one is 43,560 square feet.
6 mi × 6 mi = 36 sections
1 sq mile = 640 acres
43,560 square feet
Checkpoint · Area 1 · Property, Legal Descriptions & Land Use
Question 1 of 10
When an owner grants a long-term lease to a tenant, which concept best explains how the owner can convey the right of possession while still retaining ownership of the property?
2 · Ownership, Title Transfer & Recording
About 11% of the national portion. How people co-own property — including Texas community property— how a deed transfers title, and how recording protects an owner’s rights.[4]
Co-Ownership & Texas Community Property
The national rule turns on the right of survivorship: has it (a deceased owner’s share passes to the survivors) and needs the four unities; has none, so each share passes by will. But Texas adds a key wrinkle — it is a state.[4]
| Type | What it is |
|---|---|
| Community property | Property acquired by either spouse during marriage — presumed owned equally by both |
| Separate property | Owned before marriage, or received during marriage by gift or inheritance |
| Homestead | The principal residence — protected from forced sale; conveying it usually needs both spouses' signatures |
Deeds & Transfer of Title
A deed conveys title from the grantor to the grantee. The gives the most protection; a gives none and is used to clear a cloud on title. A deed must be delivered and accepted to transfer title — and the grantee never signs it.
Recording & Title Assurance
Recording a deed in the county records establishes the chain of title and lien priority and gives to the world. then protects the buyer and lender against defects that existed before the policy — undiscovered liens, forgery, or recording errors.
Checkpoint · Area 2 · Ownership, Title Transfer & Recording
Question 1 of 10
A homebuyer receiving a general warranty deed is told it includes a covenant against encumbrances. Which of the following situations would most directly breach that particular covenant?
3 · Property Value & Appraisal
About 13% of the national portion.What creates value, the three approaches an appraiser uses, and how a licensee’s CMA differs from a formal appraisal.[1]
Value Principles
is the most probable price under fair conditions — an opinion, distinct from the actual market price. The basis of value is : the legal, possible, feasible, and most profitable use of a site.
| Principle | What it means |
|---|---|
| Substitution | A buyer pays no more than the cost of an equally desirable substitute |
| Highest and best use | Value reflects the most profitable legal, possible, feasible use |
| Conformity | Value is maximized when a property fits its surroundings |
| Progression / regression | A modest home gains value near larger ones; a fine home loses value near lesser ones |
| Supply and demand | Value rises when demand exceeds supply, and falls when supply exceeds demand |
The Three Approaches to Value
An appraiser estimates value three ways — sales comparison (best for homes), cost (best for new or special-use property), and income (best for rentals) — then reconciles them into one opinion, weighing the indications rather than averaging.
CMA vs. Appraisal
A licensee prepares a from recent comparable sales to help price a listing. A formal is an impartial, USPAP-compliant opinion by a licensed appraiser — what a lender relies on.
Checkpoint · Area 3 · Property Value & Appraisal
Question 1 of 10
A buyer's agent prepares a comparative market analysis to help a client decide how much to offer on a listed home. Which best describes the value this analysis adds for the buyer?
4 · Contracts & Agency
The single largest national area.What makes a contract valid, the kinds of listing agreements, and the fiduciary duties at the heart of agency — applied through Texas’s promulgated forms.[2]
Contract Law & Listings
A valid needs mutual agreement, consideration, legal purpose, and competent parties — and, for real estate, writing under the . A missing essential element makes it void; a defect like a minor’s signature makes it voidable.
In Texas, a must be in writing and signed for the broker to recover a commission (TRELA Sec. 1101.806).[2]
| Listing type | Who earns the commission |
|---|---|
| Exclusive right-to-sell | The listing broker — no matter who finds the buyer |
| Exclusive agency | The broker, unless the owner sells it themselves |
| Open listing | Only the broker who actually finds the buyer |
| Net listing | Broker keeps the amount above the seller's set price — tightly restricted in Texas |
Agency & Fiduciary Duties
Agency is a fiduciary relationship between an agent and a principal. The duties are remembered as OLD CAR: . In Texas, when one firm represents both sides, the broker uses the relationship (Module 0), not dual agency.
Checkpoint · Area 4 · Contracts & Agency
Question 1 of 10
A homeowner signs a listing in which she agrees to accept a stated net amount from the sale and lets the broker keep anything above that figure as compensation. This compensation structure describes which listing type, which is prohibited or discouraged in many states?
5 · Real Estate Practice
About 12% of the national portion. Fair housing, handling client money, and the leasing and management work a licensee does day to day.[5]
Fair Housing
The (1968) bans discrimination based on race, color, religion, national origin, sex, familial status, and disability — seven federal protected classes.[5] Texas enforces these protections through its own Fair Housing Act, administered by the Texas Workforce Commission. The big three violations:
| Practice | What it is |
|---|---|
| Steering | Guiding buyers toward or away from areas by protected class |
| Blockbusting | Inducing panic selling by claiming a protected class is moving in |
| Redlining | A lender refusing to lend or insure in an area by its makeup |
Trust Funds & Professional Conduct
A broker keeps client funds in a separate trust (escrow) account, and a Texas sales agent may not hold trust funds at all — the agent must immediately turn any money over to the sponsoring broker (22 TAC 535.146). client money with the broker’s own funds is a TRELA violation. Commission rates are always negotiable.
Leases & Property Management
A lease conveys the right to use property for a term in exchange for rent (landlord = lessor, tenant = lessee). Know the types: a gross lease (landlord pays expenses), a net lease (tenant pays some expenses), and a percentage lease (retail rent tied to sales).
Checkpoint · Area 5 · Real Estate Practice
Question 1 of 10
Under the federal Do Not Call rules, which situation generally permits a salesperson to call a consumer whose number appears on the National Do Not Call Registry?
6 · Disclosures & Environmental Issues
About 10% of the national portion.What a seller and agent must reveal — including Texas’s own Seller’s Disclosure Notice — and the environmental hazards the exam expects you to recognize.[3]
Texas Seller’s Disclosure & Material Facts
A — anything that would affect a buyer’s decision or price — must be disclosed, including known . Texas codifies this for homes: under Property Code Sec. 5.008, the seller of residential property of not more than one dwelling unit must give the buyer a written of the property’s condition, including flooding and 100-year floodplain status.[3]
Environmental Hazards
The most heavily tested federal rule is the : for housing built before 1978, the seller or landlord must disclose known lead paint, give the EPA pamphlet, and (for sales) allow a 10-day inspection window.[7]
| Hazard | What to know |
|---|---|
| Lead-based paint | Pre-1978 housing; federal disclosure + EPA pamphlet + 10-day test window |
| Radon | Odorless radioactive gas from soil; second-leading cause of lung cancer |
| Asbestos | Old insulation/flooring; remove or encapsulate to control fibers |
| Mold | Grows in damp areas; may require disclosure and remediation |
| Underground storage tank | Can leak and contaminate soil and groundwater |
Checkpoint · Area 6 · Disclosures & Environmental Issues
Question 1 of 10
A buyer with young children specifically asks an agent whether any registered sex offenders live on the block. What is the most appropriate response under the framework associated with Megan's Law?
7 · Financing & Settlement
About 9% of the national portion. The instruments that secure a loan — Texas uses the deed of trust — the main loan types, the federal lending laws, and what happens at closing.[6]
Notes, Deeds of Trust & Clauses
Texas secures real estate loans with a (the borrower conveys the property to a trustee), and the is the borrower’s promise to repay. repays principal and interest so the balance reaches zero by the end of the term. The deed of trust lets the lender use a non-judicial foreclosure on default — a key Texas feature. Watch the clauses:
| Clause | What it does |
|---|---|
| Acceleration | Lets the lender demand the full balance on default |
| Due-on-sale (alienation) | Loan must be paid in full when the property is sold |
| Prepayment penalty | Fee for paying the loan off early |
| Power of sale | Lets the trustee sell at a non-judicial foreclosure after default (Texas deed of trust) |
Loan Types & Lending Laws
Three loan types anchor the exam — conventional (PMI when tops 80%), FHA (insured), and VA (guaranteed, often 0% down). requires settlement-cost disclosures and bans kickbacks, and TILA requires disclosing the cost of credit (the APR).[6] Together they produce the Loan Estimate and Closing Disclosure.
Closing & Settlement
At closing, an escrow holder disburses funds when all conditions are met. The Loan Estimate is due within three business days of application, and the Closing Disclosure must reach the borrower at least three business days before closing.[6] Texas closings are typically handled by a title company.
Checkpoint · Area 7 · Financing & Settlement
Question 1 of 10
Under the Real Estate Settlement Procedures Act, a lender that requires the borrower to deposit money into an escrow account for taxes and insurance is generally restricted in how large a reserve cushion it may collect and hold. What is the primary purpose of this restriction?
8 · Real Estate Math
About 9% of the national portion — and the most learnable points on the test. A handful of formulas cover almost every calculation: area, commission, seller net, loan-to-value, taxes, and proration.[1]
Area & Land Measurement
Area of a rectangle is length × width. To convert square feet to acres, divide by 43,560. A is 640 acres.
Commission, Net & Profit
Commission = sale price × rate. To find the price for a target seller net, divide the net by (1 − rate). Percent of profit or loss divides the gain or loss by the original cost.
| To find | Formula |
|---|---|
| Commission | Sale price × commission rate |
| Price for a target net | Net ÷ (1 − commission rate) |
| Loan-to-value (LTV) | Loan amount ÷ value (or price) |
| Value (income approach) | Net operating income ÷ capitalization rate |
| Annual property tax | Assessed value × tax rate (or mills × 0.001) |
Loans, Taxes & Proration
is loan ÷ value. A is \$0.001 of tax per dollar of assessed value, so 18 mills is a tax of 1.8%. splits taxes, rent, and interest by the days each party owns the property — the seller is usually charged through the closing date.
Checkpoint · Area 8 · Real Estate Math
Question 1 of 10
A lender approves an 80% loan-to-value loan and the borrower receives a loan of $268,000. What was the value the lender used to size this loan?
How to Use This Study Guide
A study guide is a map, not the whole territory — pair it with our free practice questions and flashcards. Because the Texas exam grades the national and state portions separately, give Module 0 (Texas law) the same weight as the heaviest national area. Lead with Texas license law and , then contracts, then lock in the math.
- 1
Read a content area here
Work through one module at a time, starting with Texas law (Module 0).
- 2
Take the checkpoint
The quick check at the end of each module exposes what didn't stick.
- 3
Drill the gaps
Send your weak area straight into the free practice questions and flashcards.
- 4
Take full, timed practice
Sit a full-length practice test to build stamina, then review every miss.
Texas Real Estate Concept Questions
Common Texas real estate principles the TREC exam actually tests — weighted toward Texas license law (TREC, IABS, intermediary brokerage, promulgated forms), with the high-yield national concepts too. Tap any card for a short, exam-ready answer backed by an official source (TREC, TRELA, the Texas Property Code, HUD, CFPB, or EPA), then test yourself on them as flashcards.
Texas Real Estate Glossary
Quick definitions for the terms you’ll see most across the Texas real estate exam — starting with the Texas-specific ones:
- Acre
- A unit of land area equal to 43,560 square feet.
- Amortization
- Repaying a loan through regular payments of interest and principal so the balance reaches zero by the end of the term.
- Appraisal
- An impartial, supported opinion of value prepared by a licensed appraiser as of a specific date, following USPAP.
- Broker-Lawyer Committee
- The six-broker, six-attorney TREC committee that drafts and revises the promulgated contract forms (TRELA Sec. 1101.155).
- Bundle of rights
- The rights that come with ownership: possession, use (enjoyment), exclusion, disposition (transfer), and control.
- Capitalization rate
- The rate of return on an income property: net operating income ÷ value. A higher cap rate implies more risk and lower value.
- Commingling
- Improperly mixing a client's trust funds with the broker's own or business funds — a TRELA violation; a sales agent may not hold trust funds at all.
- Community property
- Under the Texas Family Code, property a spouse acquires during marriage is presumed owned equally by both spouses; separate property is owned before marriage or received by gift or inheritance.
- Comparative market analysis (CMA)
- A licensee's estimate of value from recent comparable sales, used to help price a listing — not a formal appraisal.
- Constructive notice
- Notice the law presumes everyone has because a document is recorded in the public record or possession is visible.
- Contingency
- A condition that must be met for a contract to become binding, such as financing, inspection, or appraisal contingencies.
- Contract
- A legally enforceable agreement between competent parties to do or refrain from doing a lawful act.
- Deed of trust
- The instrument Texas uses to secure a real estate loan; the borrower conveys the property to a trustee, who can conduct a non-judicial foreclosure sale if the borrower defaults.
- Earnest money
- A buyer's good-faith deposit showing serious intent; in a TREC contract it is usually held by a title company and applied to the price at closing.
- Easement
- A nonpossessory right to use another's land for a specific purpose, such as a driveway or utility line.
- Eminent domain
- Government's power to take private property for public use through condemnation, paying the owner just compensation.
- Encroachment
- An unauthorized intrusion of an improvement (a fence, building, or driveway) onto a neighbor's land; usually revealed by a survey.
- Encumbrance
- Any claim, lien, charge, or right that limits an owner's title — liens, easements, encroachments, and deed restrictions.
- Escheat
- The reversion of property to the state when an owner dies with no will and no legal heirs.
- Fair Housing Act
- The 1968 federal law prohibiting housing discrimination based on race, color, religion, national origin, sex, familial status, and disability; Texas adds its own Fair Housing Act.
- Fee simple
- The most complete form of ownership — absolute, of unlimited duration, and freely transferable by deed or will. Also called fee simple absolute.
- Fiduciary duties
- The duties an agent owes the principal — Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care (OLD CAR).
- Fixture
- An item of personal property attached to real property so as to become part of it and transfer with the land. The MARIA tests decide whether an item is a fixture.
- General warranty deed
- The deed giving the most protection; the grantor warrants clear title against all defects, even those arising before the grantor's ownership.
- Highest and best use
- The legally permissible, physically possible, financially feasible, and most profitable use of a site — the basis of value.
- Homestead
- A Texas owner's principal residence, protected by the Texas Constitution from forced sale for most unsecured debts; conveying or encumbering a homestead usually needs both spouses' signatures.
- Information About Brokerage Services (IABS)
- TREC's mandatory written notice (TREC No. IABS 1-0) given at the first substantive communication with a party, explaining a broker's possible roles and that a license holder must put the client first.
- Intermediary
- The Texas relationship in which a BROKER represents both buyer and seller with each party's written consent; the broker may appoint associated license holders to each party and must remain neutral. Texas does not allow common-law dual agency.
- Joint tenancy
- Co-ownership with the right of survivorship; requires the four unities of time, title, interest, and possession.
- Latent defect
- A hidden physical defect not discoverable by ordinary inspection; a known latent defect must be disclosed.
- Lead-based paint disclosure
- The federal requirement that sellers and landlords of pre-1978 housing disclose known lead paint and give a 10-day inspection window for sales.
- Legal Update I & II
- The two 4-hour continuing-education courses (8 hours total) Texas license holders must take each renewal to stay current on TRELA, TREC rules, and contract forms.
- Life estate
- A freehold estate that lasts for the lifetime of a named person; it cannot be willed because it ends at death.
- Listing agreement
- A contract employing a broker to find a buyer for the owner's property; in Texas it must be in writing and signed for the broker to collect a commission.
- Loan-to-value ratio (LTV)
- The loan amount divided by the property's value or price; a higher LTV means a smaller down payment and more lender risk.
- Market value
- The most probable price a property should bring in a competitive, open market under fair-sale conditions; an opinion of value.
- Material fact
- A fact that would affect a reasonable buyer's decision to buy or the price they would pay; it must be disclosed.
- Metes and bounds
- A legal description using distances (metes) and compass directions (bounds) traced back to a point of beginning.
- Mill rate
- A property-tax rate expressed in thousandths: 1 mill equals $1 of tax per $1,000 of assessed value.
- Net operating income (NOI)
- Effective gross income minus operating expenses, before any mortgage payment; the income figure used in the income approach.
- Police power
- Government's authority to regulate land for public health, safety, and welfare — the basis for zoning and building codes, with no payment to the owner.
- Procuring cause
- The agent whose actions set in motion an unbroken chain of events leading to the sale, earning the commission.
- Promissory note
- The borrower's written promise to repay a debt; the evidence of the debt that the deed of trust secures.
- Promulgated forms
- Standard contract forms TREC adopts by rule and that license holders must use — for example, the One to Four Family Residential Contract (Resale), TREC No. 20-18.
- Proration
- Dividing prepaid or accrued expenses such as taxes, rent, and interest fairly between buyer and seller as of the closing date.
- Quitclaim deed
- A deed conveying only whatever interest the grantor has, with no warranties; often used to clear a cloud on title.
- Real property
- Land plus everything permanently attached to it (improvements and fixtures) and the bundle of legal rights of ownership.
- RESPA
- The Real Estate Settlement Procedures Act — a federal law requiring loan-cost disclosures and prohibiting kickbacks at closing.
- Section (survey)
- One square mile of land — 640 acres — and one thirty-sixth of a 6-mile-square township in the rectangular survey system.
- Seller's Disclosure Notice
- The written notice a Texas seller of a single residential dwelling must give the buyer under Property Code Sec. 5.008, disclosing the seller's knowledge of the property's condition.
- Sponsoring broker
- The licensed Texas broker who sponsors a sales agent. A sales agent's license is inactive until sponsored, and the agent may act only for and be paid by the sponsoring broker.
- Statute of frauds
- The law requiring contracts for the sale of real estate (and most leases over a year) to be in writing to be enforceable.
- Steering
- Illegally guiding buyers toward or away from neighborhoods based on a protected class — a fair-housing violation.
- Tenancy in common
- Co-ownership in which each owner holds an undivided, willable share; there is no right of survivorship.
- Title insurance
- A policy protecting the insured against loss from title defects that existed before the policy date, such as liens or recording errors.
- TREC
- The Texas Real Estate Commission — the state agency that licenses and regulates Texas brokers and sales agents under TRELA. Nine members, appointed by the Governor.
- TRELA
- The Texas Real Estate License Act — Chapter 1101 of the Texas Occupations Code, the statute that creates TREC and governs real estate licensing in Texas.
Free Texas Real Estate Exam Study Materials & Resources
Everything you need to prepare for the Texas real estate exam is free here — no paywall, no sign-up. This guide is the foundation; pair it with the rest of our free Texas real estate study materials for active recall, timed practice, and last-minute review:
- Texas Real Estate Practice Test — exam-style questions across the Texas state portion and all eight national content areas, with explanations.
- Texas Real Estate Flashcards — active-recall decks for the high-yield TREC terms, fiduciary duties, and math formulas.
Texas Real Estate Exam Study Guide FAQ
The Texas sales agent licensing exam has two portions taken in one session through Pearson VUE: a national (general) portion of 85 scored questions and a Texas state-law portion of 40 scored questions, for 125 scored items plus a few unscored pretest questions. You must pass both portions; confirm the current count with TREC and Pearson VUE.
Each portion is graded separately and you must pass both. The national portion requires 56 of 80 scored questions correct and the state portion requires 21 of 30 scored questions correct (roughly 70% each). Because the cut scores are set by TREC and Pearson VUE, verify the current passing standard before your exam.
Texas requires 180 hours of TREC-approved qualifying education — six 30-hour courses: Principles of Real Estate I and II, Law of Agency, Law of Contracts, Promulgated Contract Forms, and Real Estate Finance. You must also pass the exam, pass a background check, and be sponsored by a licensed Texas broker before the license becomes active.
Texas does not allow common-law dual agency. When one brokerage represents both buyer and seller, the broker acts as a statutory intermediary under TRELA Sec. 1101.559, only with each party's prior written consent that states who pays the broker. The broker may appoint different associated license holders to each party but must stay neutral and may not disclose one party's price or negotiating position to the other.
Under TRELA Sec. 1101.558, a license holder must give the written IABS notice (TREC No. IABS 1-0) at the time of the first substantive communication with a party about a specific property or transaction. It is not required for a residential lease of one year or less with no sale contemplated, or when the party is already represented by another license holder.
Promulgated forms are standard contracts TREC adopts by rule that license holders must use for the transactions they cover, such as the One to Four Family Residential Contract (Resale), TREC No. 20-18. The Broker-Lawyer Committee drafts them. Agents fill in factual blanks but may not draft contract language, which would be the unauthorized practice of law.
After the first renewal, a Texas sales agent must complete 18 hours of continuing education each two-year renewal period: 4 hours of Legal Update I, 4 hours of Legal Update II, 3 hours of contract-related coursework, and 7 hours of electives. A first-time renewing sales agent must instead complete additional SAE qualifying courses.
No. Under TREC rule 22 TAC 535.146, a sales agent may not maintain a trust or escrow account and must immediately deliver any money received to the sponsoring broker. In a TREC contract, earnest money is typically held by the title company or escrow agent named in the contract, who generally cannot release contested funds without the parties' written agreement or a court order.
Start with Module 0 — Texas license law, TREC, IABS, intermediary brokerage, and promulgated forms, which make up the 40-question state portion — then work through the eight national content areas in order. Take the checkpoint quiz after each module, drill weak areas with our free practice questions and flashcards, and spend extra time on agency and contracts.
Yes — the full guide, the checkpoints, the glossary, the practice questions, and the flashcards are 100% free, with no account required.
References
- 1.Texas Real Estate Commission. “Texas Real Estate Commission (TREC) — Home.” TREC. ↑
- 2.Texas Legislature. “Texas Occupations Code Chapter 1101 (The Real Estate License Act, TRELA).” Texas Statutes. ↑
- 3.Texas Legislature. “Texas Property Code Sec. 5.008 (Seller's Disclosure of Property Condition).” Texas Statutes. ↑
- 4.Texas Legislature. “Texas Family Code Ch. 3 (Marital Property Rights and Liabilities).” Texas Statutes. ↑
- 5.U.S. Department of Housing and Urban Development. “Fair Housing Act Overview.” HUD. ↑
- 6.Consumer Financial Protection Bureau. “Real Estate Settlement Procedures Act (Regulation X).” CFPB. ↑
- 7.U.S. Environmental Protection Agency. “Real Estate Disclosure (Lead-Based Paint).” EPA. ↑
- 8.U.S. Geological Survey. “How is the Public Land Survey System organized?.” USGS. ↑
Sources for the concept answers
Every answer in the Texas real estate concept questions above is drawn from an authoritative primary source:
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