TX Broker Practice Exam.
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1. Why does a purchaser record a deed in the public land records after closing?

• A. Recording is required before the deed can be signed by the grantor
• B. Recording gives constructive notice to the world and establishes priority
• C. Recording converts a quitclaim deed into a general warranty deed
• D. Recording is what makes delivery and acceptance unnecessary

2. A prospective buyer signs and hands over a written offer to purchase a house. Before the seller communicates any acceptance, the buyer telephones the seller to withdraw the offer. Is the withdrawal effective?

• A. Yes, because an offer may be revoked at any time before acceptance is communicated.
• B. No, because a written offer becomes irrevocable once it is delivered.
• C. No, because only the seller may terminate a pending offer.
• D. Yes, but only if the buyer forfeits the earnest money as liquidated damages.

3. A 16-year-old minor signs a contract to purchase a condominium. Which term best describes this contract's status?

• A. Void, because it never existed legally.
• B. Voidable, because a party such as a minor may disaffirm it.
• C. Unenforceable, because it was not in writing.
• D. Valid and binding, because consideration was exchanged.

4. A licensee agrees to represent a seller and, several months after the closing, is asked by a nosy acquaintance to reveal the lowest price the former seller would have accepted. Under the agent's fiduciary duties, what is the licensee's obligation?

• A. The duty ended at closing, so the licensee may share the figure freely.
• B. The licensee must keep the information confidential because that duty survives termination of the agency.
• C. The licensee may disclose it only if the acquaintance is also a client.
• D. The licensee must disclose it to promote honesty and fair dealing.

5. A broker holds earnest money on behalf of a client. To comply with the accounting duty, where must the broker place those funds?

• A. In the broker's operating account, so long as records are kept.
• B. In a separate trust or escrow account, never commingled with the broker's own funds.
• C. In any interest-bearing account chosen by the broker.
• D. In the seller's personal account until closing.

6. A seller responds to a buyer's offer by returning the document with the price raised by $10,000 and the closing date moved. Legally, what is the effect of the seller's response on the buyer's original offer?

• A. It accepts the offer with minor modifications that the buyer must honor.
• B. It operates as a counteroffer that rejects and extinguishes the original offer.
• C. It has no effect until the buyer signs again.
• D. It creates a binding contract at the original price.

7. A grantor wants to give a buyer the greatest possible protection of title, warranting against all defects arising at any time. Which deed should be used?

• A. A quitclaim deed.
• B. A general warranty deed.
• C. A life estate deed.
• D. A deed of trust.

8. A parcel has an unpaid property tax lien recorded years after a first mortgage was recorded against the same land. When the property is sold at auction, how do these liens rank in priority?

• A. The mortgage takes priority because it was recorded first.
• B. The two liens share priority equally regardless of type.
• C. The property tax lien takes priority over the mortgage regardless of when it was recorded.
• D. Priority is decided by the size of each debt.

9. A homeowner wants to hold the strongest, most complete ownership interest the law recognizes — one that can be freely passed to heirs and sold without limitation. Which estate best describes this interest?

• A. A life estate
• B. A fee simple absolute
• C. An easement appurtenant
• D. A leasehold estate held under a quitclaim

10. Grantor conveys property "to Alice for the duration of her life, then to Bob." What best describes Bob's position?

• A. Bob holds a fee simple absolute that vests immediately
• B. Bob is a remainderman who takes title after Alice's death
• C. Bob holds only an easement appurtenant over the parcel
• D. Bob's interest is void because life estates cannot name a future taker

11. A seller signs a document intended to transfer real property but never physically hands it over to the buyer and the buyer never accepts it. Under the requirements for a valid deed, what is the effect?

• A. The deed is fully effective once signed by the grantor
• B. The deed is ineffective because delivery and acceptance are required
• C. The deed is effective only if it omits a legal description
• D. The deed is effective because recording substitutes for delivery

12. Which element is NOT among the requirements for a deed to be effective?

• A. A legal description of the property
• B. A granting clause (words of conveyance)
• C. The signature of the grantee
• D. Delivery and acceptance

13. A cautious buyer wants the broadest possible protection of title, with the grantor standing behind the title against defects arising at any point in the chain of ownership. Which deed should the buyer insist upon?

• A. A quitclaim deed
• B. A general warranty deed
• C. A deed containing no granting clause
• D. A life estate deed

14. An owner is uncertain whether she holds any interest at all in a parcel but is willing to transfer whatever interest she may have, without promising anything about the title. Which instrument fits this situation?

• A. A general warranty deed
• B. A quitclaim deed
• C. A deed with covenants of seisin and warranty forever
• D. An easement appurtenant

15. A property has three liens: a mortgage recorded in 2019, a mechanic's lien recorded in 2021, and an unpaid property tax lien assessed in 2023. Which generally has priority?

• A. The 2019 mortgage, because it was recorded first
• B. The 2021 mechanic's lien, because it is more recent than the mortgage
• C. The 2023 property tax lien, regardless of when the others were recorded
• D. All three share priority equally by date

16. Two adjoining parcels share a driveway easement: Parcel A benefits from the right to cross Parcel B. In easement-appurtenant terms, how are the parcels described?

• A. Parcel A is the servient tenement; Parcel B is the dominant tenement
• B. Parcel A is the dominant tenement; Parcel B is the servient tenement
• C. Both parcels are servient tenements
• D. Neither parcel is burdened because the easement does not run with the land

17. A dominant-tenement owner sells her parcel to a new buyer. What generally happens to an existing easement appurtenant that benefits that parcel?

• A. It is extinguished automatically upon the sale
• B. It runs with the land and continues to benefit the new owner
• C. It converts into a property tax lien on the servient tenement
• D. It must be re-created by a general warranty deed each time the land is sold

18. A seller receives a buyer's offer and returns it with the price raised by $5,000, leaving all other terms unchanged. Under contract law, what is the legal effect of the seller's response?

• A. It is a valid acceptance because the essential terms remain the same.
• B. It is a counteroffer that rejects and extinguishes the buyer's original offer.
• C. It is a contingency that suspends the buyer's duty to perform.
• D. It creates a voidable contract the buyer may later disaffirm.

19. Which combination lists the essential elements required for a valid real estate contract?

• A. Mutual assent, consideration, legally competent parties, and a lawful object.
• B. Offer, earnest money, recording, and delivery.
• C. Consideration, a granting clause, acknowledgment, and possession.
• D. Mutual assent, a contingency, a title search, and closing.

20. An oral agreement to sell a parcel of land is fully agreed to by both parties, but nothing is put in writing. The seller then refuses to proceed. Why can the buyer likely not enforce the agreement in court?

• A. Because the Statute of Frauds requires contracts for the sale of real estate to be in writing and signed by the party to be charged.
• B. Because oral contracts are automatically void from the outset.
• C. Because the buyer failed to record the agreement in the public land records.
• D. Because land-sale agreements require specific performance to form.

21. A purchase agreement states that the buyer's obligation to close depends on the buyer securing mortgage financing. What is this provision called?

• A. A liquidated damages clause.
• B. A contingency.
• C. A counteroffer.
• D. An acceleration clause.

22. After the parties sign a binding purchase contract, the seller changes her mind and refuses to convey the property. Which remedy is available to the buyer specifically because land is considered unique?

• A. Retention of the earnest money as liquidated damages.
• B. Specific performance to compel the conveyance.
• C. Revocation of the original offer.
• D. Disaffirmance of the contract.

23. A buyer defaults on a signed purchase contract that contains a liquidated damages clause. What is the seller's agreed remedy under that clause?

• A. The seller may compel the buyer to complete the purchase through specific performance.
• B. The seller may retain the earnest money as the agreed measure of the buyer's default.
• C. The seller must return the earnest money and re-list the property.
• D. The seller may declare the entire purchase price immediately due.

24. A tenant and landlord orally agree to a lease running for a term of three years. Must this lease be in writing to be enforceable?

• A. Yes, because the Statute of Frauds requires leases longer than one year to be in writing and signed by the party to be charged.
• B. No, because leases are exempt from the Statute of Frauds.
• C. No, because only sales of real estate must be in writing.
• D. Yes, but only because the lease must also be recorded.

25. A buyer emails an offer, and the seller replies, "I accept, but only if you also purchase the detached workshop for an additional sum." Why does no contract form on the original terms?

• A. Because acceptance must be unqualified, and adding a material term operates as a counteroffer that rejects the original offer.
• B. Because an emailed offer cannot satisfy the requirement of mutual assent.
• C. Because the seller may revoke the offer at any time before acceptance.
• D. Because the added term is a contingency that automatically forms the contract.

26. A borrower obtains a real estate loan. Which pair of instruments is created in a typical mortgage loan transaction?

• A. A promissory note evidencing the debt and a mortgage or deed of trust pledging the property as security
• B. A general warranty deed and a quitclaim deed
• C. A Loan Estimate and a life estate
• D. A listing agreement and an easement appurtenant

27. In a state that follows the lien theory of mortgages, who holds legal title to the property while the loan is being repaid?

• A. The lender holds legal title until the debt is paid
• B. The borrower holds title and the lender holds only a lien
• C. The county recorder holds title in trust
• D. Title is split equally between borrower and lender

28. After a borrower misses several payments, the lender wishes to demand the full remaining loan balance at once rather than only the overdue installments. Which mortgage clause permits this?

• A. The acceleration clause
• B. The substitution clause
• C. The liquidated damages clause
• D. The confidentiality clause

29. A lender charges 2 discount points on a $200,000 loan. Based on the definition of a discount point, what is the dollar cost of those points, and what is their purpose?

• A. $4,000, paid as prepaid interest to buy down the interest rate
• B. $2,000, refunded to the borrower at closing
• C. $20,000, applied to the loan principal
• D. $400, used to pay the appraisal fee

30. An eligible veteran wants a loan program that is guaranteed by the government and can permit a purchase with no down payment. Which loan type fits?

• A. A VA loan
• B. A conventional loan
• C. An FHA loan
• D. A quitclaim loan

31. Which statement correctly distinguishes conventional and FHA financing?

• A. Conventional loans are not government-backed, while FHA loans are insured by the Federal Housing Administration and allow low down payments
• B. Conventional loans are insured by the FHA, while FHA loans are guaranteed for veterans
• C. Both conventional and FHA loans are guaranteed by the VA
• D. FHA loans are not government-backed, while conventional loans require no down payment

32. A buyer makes a 10% down payment on a conventional loan. Based on the standard threshold, what is the likely consequence?

• A. Private mortgage insurance will typically be required
• B. The loan automatically converts to a VA loan
• C. No mortgage insurance can ever be required on a conventional loan
• D. The lender must hold legal title until payoff

33. A settlement agent is asked whether a lender may pay an agent an unearned fee simply for referring borrowers. Which federal law addresses this, and what does it require?

• A. RESPA, which prohibits kickbacks and unearned referral fees and requires the Loan Estimate and Closing Disclosure
• B. TILA, which permits referral fees but caps them at one point
• C. The Statute of Frauds, which requires all referral fees to be in writing
• D. The Civil Rights Act of 1866, which exempts referral fees from disclosure

34. So that borrowers can compare the true cost of credit, which disclosures does the Truth in Lending Act, implemented by Regulation Z, require?

• A. The annual percentage rate (APR) and the total finance charge
• B. The seller's original purchase price and property tax history
• C. The listing broker's commission split
• D. The capitalization rate and net operating income

35. A homeowner refinances the mortgage on their principal residence. Under TILA and Regulation Z, what protection may apply to certain such refinances?

• A. A three-day right of rescission
• B. A mandatory acceleration of the old loan
• C. An automatic waiver of the APR disclosure
• D. A guarantee of no down payment

36. A property manager is engaged to lease units, collect rent, hire vendors, and handle day-to-day operations for an apartment complex over an indefinite period. How is this agent best classified?

• A. A special agent, because leasing is a single type of transaction.
• B. A general agent, because the manager may bind the principal in a range of matters.
• C. A dual agent, because the manager serves both owner and tenants.
• D. A customer, because no fiduciary duties are owed.

37. A buyer submits a written offer. Before the seller communicates any acceptance, the buyer calls to withdraw the offer. Is the withdrawal effective?

• A. No, because a written offer cannot be withdrawn once submitted.
• B. No, because the seller was still considering the offer.
• C. Yes, because an offer may be revoked any time before acceptance is communicated.
• D. Yes, but only if the buyer forfeits the earnest money.

38. Two neighbors shook hands on an oral agreement to sell a vacant lot, but nothing was ever written down. When the seller backs out, why can the buyer not enforce the deal in court?

• A. Because oral contracts always lack consideration.
• B. Because the Statute of Frauds requires contracts for the sale of real estate to be in writing and signed by the party to be charged.
• C. Because a vacant lot cannot be sold without a survey.
• D. Because the parties were not legally competent.

39. A buyer defaults on an otherwise valid purchase agreement. The seller refuses to sue for money and instead asks the court to force the buyer to complete the purchase. Which remedy is the seller pursuing, and why is it available for real estate?

• A. Liquidated damages, because the earnest money is forfeited.
• B. Rescission, because the contract can be undone.
• C. Specific performance, because land is deemed unique.
• D. An acceleration remedy, because the balance is due.

40. An agent discourages a family from viewing homes in one neighborhood and steers them toward another based on the family's national origin. Which prohibited practice under the federal Fair Housing Act does this describe?

• A. Blockbusting.
• B. Redlining.
• C. Steering.
• D. A lawful client preference, since national origin is not protected.

41. While reviewing forms of ownership, a candidate encounters the term 'bundle of rights.' Which description best captures this concept?

• A. A set of distinct rights an owner holds, such as the rights to possess, use, exclude, and transfer the property.
• B. A single indivisible right that cannot be separated or transferred.
• C. A physical bundle of documents kept at the county office.
• D. A limit on how many properties one person may ever own.

42. In the Property Ownership section, a client asks about an interest that gives one party the right to cross a neighbor's land to reach a road. Which term best describes this interest?

• A. An easement.
• B. A fee simple absolute.
• C. A personal-property chattel.
• D. A mortgage note.

43. A contract for the sale of land is fully signed but neither party has yet performed their obligations. This contract is most accurately classified as:

• A. An executed contract
• B. An executory contract
• C. A voidable contract
• D. An unenforceable contract

44. A verbal agreement to sell a parcel of real estate is reached over the phone, but nothing is put in writing. Under the Statute of Frauds, this agreement is:

• A. Automatically valid because both parties agreed
• B. Generally unenforceable because contracts for the sale of real estate must be in writing
• C. Void because verbal agreements are illegal
• D. Enforceable only if witnessed by a third party

45. A purchase contract provides that if the buyer defaults, the seller may keep the earnest money as a pre-agreed amount of compensation. This provision is an example of:

• A. Liquidated damages
• B. Punitive damages
• C. An assignment
• D. A contingency

46. Two parties agree to discharge their existing contract and substitute a new party in place of one of the original parties, with everyone's consent. This substitution is called:

• A. Assignment
• B. Novation
• C. Ratification
• D. Reformation

47. A purchase agreement states that the buyer's obligation to close is conditioned on obtaining mortgage financing within a stated period. This conditional provision is best described as:

• A. A contingency
• B. A counteroffer
• C. An addendum releasing all obligations
• D. A liquidated damages clause

48. A candidate paid the examination fee and did not pass on the first attempt. To sit for the exam a second time, how much must the candidate pay again, assuming the standard published fee applies to each attempt?

• A. $0 — retakes are free
• B. $19
• C. $39
• D. $78

49. Which of the following statements correctly pairs an examination parameter with its published value?

• A. The examination fee is $39.
• B. The examination contains 240 scored questions.
• C. The examination is allotted 145 minutes.
• D. The National passing standard is 145 correct questions.

50. On the National portion of the examination, what is the minimum number of questions a candidate must answer correctly to pass?

• A. 45 questions
• B. 53 questions
• C. 60 questions
• D. 75 questions

51. A buyer transfers all of their rights and interest under an existing purchase contract to a third party. This transfer of contractual rights is known as:

• A. Rescission
• B. Assignment
• C. Revocation
• D. Acceptance

52. A study group debates the passing standard for the National portion of the exam. Which statement correctly reflects the confirmed passing requirement?

• A. A candidate must answer 60 questions correctly on the National examination.
• B. A candidate must answer all 145 questions correctly.
• C. A candidate must answer 240 questions correctly.
• D. There is no passing threshold; the exam is ungraded.

53. A candidate preparing for the licensing exam wants to know how the Property Ownership section fits into the overall test. Based only on the confirmed exam structure, which statement is accurate?

• A. The Property Ownership items are drawn from a total pool of 145 scored questions on the exam.
• B. The Property Ownership items are the only scored questions on the exam.
• C. The exam contains no scored questions at all.
• D. The exam contains exactly 60 scored questions in total.

54. In the Property Ownership section, a broker explains the difference between real property and personal property to a new agent. Which characterization best distinguishes the two?

• A. Real property includes land and things permanently affixed to it, while personal property is movable and not permanently attached.
• B. Real property is always movable, while personal property is always affixed to land.
• C. Real and personal property are legally identical in every respect.
• D. Personal property can never be converted into real property under any circumstances.

55. An agent studying the Property Ownership outline reviews the concept of a fixture. Which factor is most commonly used to determine whether an item has become a fixture?

• A. The manner and permanence of the item's attachment to the real property.
• B. The color of the item regardless of how it is attached.
• C. The brand name printed on the item.
• D. Whether the item was purchased with cash or credit.

56. A candidate compares an estate held indefinitely with full ownership rights against a right to use property for the duration of someone's life. Which pairing correctly labels these two interests?

• A. A fee simple estate versus a life estate.
• B. A leasehold versus an easement.
• C. A lien versus an encumbrance.
• D. A fixture versus a chattel.

57. A candidate wants to confirm that meeting the National passing standard does NOT depend on getting every question right. Given the confirmed figures, which statement is consistent with the exam design?

• A. A candidate can pass the National examination by answering 60 questions correctly, which is fewer than the 145 scored questions on the exam.
• B. A candidate must answer all 145 scored questions correctly to pass the National examination.
• C. The passing requirement of 60 correct exceeds the total of 145 scored questions.
• D. The passing requirement and the total question count are the same number.

58. A buyer and seller of residential real property want their signed purchase agreement to be legally enforceable. Which element is essential to form a valid contract between them?

• A. A mutual agreement (offer and acceptance) supported by consideration
• B. Notarization of both signatures before a licensed notary
• C. Recording of the agreement in the county property records
• D. Approval of the terms by a licensed real estate broker

59. A seller receives a written offer and returns it to the buyer with the price increased and the closing date changed, then signs it. In contract terms, the seller's response is best described as:

• A. An acceptance that binds both parties immediately
• B. A counteroffer that terminates the original offer
• C. A ratification of the buyer's original terms
• D. An option that keeps the original offer open

60. A minor who has not reached the age of majority signs a contract to purchase real property. As to the minor, the contract is generally:

• A. Void from the outset
• B. Voidable at the option of the minor
• C. Fully binding on both parties
• D. Enforceable only by the minor's parents

61. After signing a purchase agreement, a buyer refuses to close without any legal justification. The seller's ability to sue to force the buyer to complete the purchase is a remedy known as:

• A. Liquidated damages
• B. Rescission
• C. Specific performance
• D. Novation

62. During the 240-minute examination window, a candidate has answered 60 questions with 90 minutes elapsed. Based only on the published total time, how many minutes remain in the examination window?

• A. 120 minutes
• B. 150 minutes
• C. 180 minutes
• D. 210 minutes