Texas · state portion

Free Texas Standards of Conduct practice questions

10 original questions with full explanations. 9 of the 40 scored state-portion questions (about 23%) come from this area.

1. 1

   Which act by a Texas license holder is grounds for TREC disciplinary action?

   • A. Declining an overpriced listing
   • B. Commingling client funds with personal funds
   • C. Working under a single broker
   • D. Including the broker's name in ads
   Show answer & explanation

   Answer: B

   Commingling trust money with personal or operating funds violates TRELA and TREC rules and is a classic disciplinary trigger.

2. 2

   Advertising by a Texas sales agent must always include:

   • A. The agent's home address
   • B. The sponsoring broker's name
   • C. The agent's license number
   • D. The property's appraised value
   Show answer & explanation

   Answer: B

   TREC advertising rules require the broker's name (or assumed name) in all advertising so the responsible brokerage is identifiable.

3. 3

   A sales agent is found to have converted client funds for personal use. What is the most likely outcome?

   • A. Temporary suspension of license
   • B. Mandatory additional education
   • C. Revocation of license
   • D. Written warning
   Show answer & explanation

   Answer: C

   Conversion of client funds is a serious violation of TREC standards and can result in license revocation.

4. 4

   What is required to be included in all advertising by a real estate broker?

   • A. The broker's phone number
   • B. The broker's email address
   • C. The broker's name
   • D. The broker's physical address
   Show answer & explanation

   Answer: C

   TREC rules require that a broker's name be included in all advertising to ensure transparency and accountability.

5. 5

   A sales agent allows an unlicensed assistant to show properties to clients. What is the most likely consequence?

   • A. The assistant will be required to obtain a license
   • B. The sales agent will receive a warning
   • C. The sales agent's license will be suspended
   • D. The broker's license will be revoked
   Show answer & explanation

   Answer: C

   Allowing an unlicensed assistant to perform duties that require a license can result in disciplinary action against the sales agent.

6. 6

   A broker commingles client funds with personal funds. What is the primary concern?

   • A. The broker's personal finances will be affected
   • B. The client's funds will be at risk
   • C. The broker's reputation will be damaged
   • D. The transaction will be delayed
   Show answer & explanation

   Answer: B

   Commingling client funds with personal funds puts the client's funds at risk of being used for personal expenses or lost in the event of the broker's financial insolvency.

7. 7

   A sales agent fails to disclose a known defect in a property. What is the most likely consequence?

   • A. The buyer will sue the seller
   • B. The sales agent will be sued by the buyer
   • C. The transaction will be cancelled
   • D. The sales agent's license will be revoked
   Show answer & explanation

   Answer: B

   Failing to disclose known defects can lead to legal action against the sales agent and damage to their professional reputation.

8. 8

   What is required of a sales agent when handling client trust funds?

   • A. To commingle them with personal funds
   • B. To use them for business expenses
   • C. To deposit them into a separate trust account
   • D. To keep them in a safe deposit box
   Show answer & explanation

   Answer: C

   Client trust funds must be deposited into a separate trust account to maintain their integrity and prevent commingling with personal funds.

9. 9

   A sales agent fails to disclose a known defect in a property to a potential buyer. This action is a violation of which TREC canon?

   • A. Fidelity
   • B. Integrity
   • C. Competency
   • D. All of the above
   Show answer & explanation

   Answer: B

   Integrity requires honesty in dealings, and failing to disclose known defects is a breach of this principle.

10. 10

    What is the primary reason a broker's name is required in advertisements?

    • A. To increase name recognition
    • B. To promote the brokerage
    • C. To ensure accountability for the advertisement's content
    • D. To comply with federal regulations
    Show answer & explanation

    Answer: C

    Requiring the broker's name in advertisements helps ensure accountability for the advertisement's content and compliance with advertising rules.