Texas Real Estate Broker Practice Exam.
Free practice test — 154 quality-checked questions, instant feedback.

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

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

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

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

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

4. A lender charges a borrower 2 discount points on a $150,000 loan to lower the interest rate offered. Based on the standard meaning of a discount point, what is the dollar cost of these points?

• A. $1,500
• B. $15,000
• C. $300
• D. $3,000

5. A property owner grants an oil and gas company the right to enter the land, drill wells, and extract minerals for a set period in exchange for royalty payments. What best describes this arrangement?

• A. A mineral lease
• B. An easement appurtenant
• C. A life estate
• D. A deed restriction

6. A seller signs a listing agreement with a broker but retains the right to sell the property personally without owing a commission if the seller, not the broker, finds the buyer. What type of listing is this?

• A. Exclusive right to sell listing
• B. Net listing
• C. Exclusive agency listing
• D. Open listing

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

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

9. 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.

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

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

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

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

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

14. A seller signs agreements with three different brokers, agreeing to pay a commission only to whichever broker actually produces a ready, willing, and able buyer. What type of listing arrangement is this?

• A. Exclusive agency listing
• B. Net listing
• C. Exclusive right to sell listing
• D. Open listing

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

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

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

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

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

19. 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 2023 property tax lien, regardless of when the others were recorded
• B. The 2021 mechanic's lien, because it is more recent than the mortgage
• C. The 2019 mortgage, because it was recorded first
• D. All three share priority equally by date

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

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

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

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

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

24. 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 buyer failed to record the agreement in the public land records.
• B. Because land-sale agreements require specific performance to form.
• C. 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.
• D. Because oral contracts are automatically void from the outset.

25. 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. An acceleration clause.
• C. A counteroffer.
• D. A contingency.

26. 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. Disaffirmance of the contract.
• C. Specific performance to compel the conveyance.
• D. Revocation of the original offer.

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

28. 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. Yes, but only because the lease must also be recorded.
• C. No, because leases are exempt from the Statute of Frauds.
• D. No, because only sales of real estate must be in writing.

29. 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 the seller may revoke the offer at any time before acceptance.
• C. Because an emailed offer cannot satisfy the requirement of mutual assent.
• D. Because the added term is a contingency that automatically forms the contract.

30. 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 Loan Estimate and a life estate
• C. A general warranty deed and a quitclaim deed
• D. A listing agreement and an easement appurtenant

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

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

33. 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. $400, used to pay the appraisal fee
• B. $2,000, refunded to the borrower at closing
• C. $20,000, applied to the loan principal
• D. $4,000, paid as prepaid interest to buy down the interest rate

34. 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 quitclaim loan
• C. An FHA loan
• D. A conventional loan

35. 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. FHA loans are not government-backed, while conventional loans require no down payment
• D. Both conventional and FHA loans are guaranteed by the VA

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

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

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

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

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

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

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

41. A signed real estate contract includes a clause stating that the written agreement represents the entire understanding between the parties, superseding any prior oral promises. What is this clause called?

• A. Contingency clause
• B. Habendum clause
• C. Merger (integration) clause
• D. Defeasance clause

42. 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. Yes, but only if the buyer forfeits the earnest money.
• C. Yes, because an offer may be revoked any time before acceptance is communicated.
• D. No, because the seller was still considering the offer.

43. 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 the parties were not legally competent.
• B. Because a vacant lot cannot be sold without a survey.
• C. Because oral contracts always lack consideration.
• D. 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.

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

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

46. A buyer and seller sign a purchase contract, but later both agree to change the closing date by signing a supplemental document that modifies just that one term. What is this document called?

• A. Addendum (amendment)
• B. Novation
• C. Assignment
• D. Rescission

47. A seller and buyer mutually agree to cancel their purchase contract entirely and return each party to their original position before the contract was signed. What is this action called?

• A. Assignment
• B. Rescission
• C. Novation
• D. Liquidated damages

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

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

49. 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 mortgage note.
• D. A personal-property chattel.

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

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

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

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

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

55. 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. $19
• B. $78
• C. $39
• D. $0 — retakes are free

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

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

57. 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. 75 questions
• C. 53 questions
• D. 60 questions

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

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

60. 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 exam contains exactly 60 scored questions in total.
• C. The exam contains no scored questions at all.
• D. The Property Ownership items are the only scored questions on the exam.

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

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

63. 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 fixture versus a chattel.
• D. A lien versus an encumbrance.

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

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

66. 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. An option that keeps the original offer open
• D. A ratification of the buyer's original terms

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

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

69. A buyer defaults on a signed purchase contract with no liquidated damages clause. The seller sues for the actual financial harm caused by the default. What is this remedy called?

• A. Specific performance
• B. Rescission
• C. Compensatory (actual) damages
• D. Novation

70. A purchase contract requires the buyer to obtain a satisfactory professional appraisal at or above the contract price before the buyer is obligated to close. What is this type of provision called?

• A. Estoppel clause
• B. Appraisal contingency
• C. Financing contingency
• D. Merger clause

71. A legal description of a parcel begins at a specific monument, then describes the boundary using directions and distances such as north 100 feet, then east 50 feet, eventually returning to the starting point. What type of legal description is this?

• A. Metes and bounds
• B. Government survey (rectangular survey)
• C. Assessor's parcel number
• D. Lot and block

72. A married couple in a common-law property state takes title together with rights of survivorship available only to married spouses, and neither spouse can convey their share without the other's consent. What is this ownership form called?

• A. Tenancy by the entirety
• B. Community property
• C. Tenancy in common
• D. Severalty

73. Which of the following correctly pairs an exam attribute with its stated value?

• A. Scored questions — 145
• B. Fee — 145 minutes
• C. National passing count — 240
• D. Duration — $39

74. A single individual purchases a home and takes title in their name alone, with no co-owners. What is this form of ownership called?

• A. Severalty
• B. Joint tenancy
• C. Tenancy in common
• D. Community property

75. A subdivision's recorded declaration limits homeowners to single-story houses and prohibits fences over four feet tall. What best describes these limitations?

• A. Zoning ordinances
• B. Encroachments
• C. Deed restrictions (restrictive covenants)
• D. Easements

76. A buyer discovers that a neighbor's fence has been built two feet onto the buyer's property line without permission. What term describes this situation?

• A. Easement
• B. Littoral right
• C. Riparian right
• D. Encroachment

77. A property borders a flowing river, and the owner's rights to use the water for reasonable purposes are governed by the property's location along the waterway. What category of rights does this describe?

• A. Air rights
• B. Riparian rights
• C. Littoral rights
• D. Subsurface rights

78. A married couple purchases a home together in Texas during their marriage using earnings from both spouses' jobs. Absent a separate property agreement, how is this property most likely classified?

• A. Tenancy in common with unequal shares
• B. Joint tenancy with an automatic right of survivorship
• C. Separate property of whichever spouse's name appears on the deed
• D. Community property owned equally by both spouses

79. A landowner grants a neighbor the right to walk across a specific path on the landowner's property to reach a lake, and this right is recorded and tied to the neighbor's parcel rather than to the neighbor personally. What type of interest has been created?

• A. Encroachment
• B. License
• C. Easement appurtenant
• D. Easement in gross

80. A rancher owns land in West Texas and later sells the surface rights to a farmer while keeping all rights to oil, gas, and other minerals beneath the land. What best describes the rancher's remaining interest?

• A. A mineral estate severed from the surface estate
• B. A life estate pur autre vie
• C. An easement in gross
• D. A leasehold estate

81. A homeowner in Texas occupies a house and lot as their primary residence. Which statement best describes the legal protection this property receives under Texas homestead law?

• A. Homestead status must be renewed with the county every year to remain effective
• B. The homestead is fully exempt from every debt the owner ever incurs, without exception
• C. Homestead protection applies only to rural properties, never to homes within a city
• D. The homestead receives protection from most general creditors, though it is not protected against obligations such as purchase-money loans, tax liens, or home equity loans

82. A landowner conveys a life estate in a parcel to a friend but does not name anyone else to receive the property afterward, so the property will return to the landowner or the landowner's heirs when the life estate ends. What is the landowner's retained interest called?

• A. Fee simple determinable
• B. Remainder
• C. Reversion
• D. Easement

83. Two unrelated investors purchase a building together and each wants to be able to sell, mortgage, or will their share independently, with no automatic right of survivorship between them. Which form of ownership fits their goals?

• A. Tenancy in common
• B. Community property
• C. Tenancy by the entirety
• D. Joint tenancy

84. A developer wants to sell individual airspace units within a building while the land, structure, and common areas remain jointly owned by all unit owners through an association. Which form of ownership does this describe?

• A. Tenancy in common
• B. Condominium ownership
• C. Timeshare ownership
• D. Cooperative ownership

85. A neighbor has openly, continuously, and without permission used a strip of another's land as if it were their own for many years, meeting all statutory requirements. What legal doctrine might allow the neighbor to eventually obtain ownership of that strip?

• A. Eminent domain
• B. Estoppel by deed
• C. Adverse possession
• D. Escheat

86. A commercial tenant installs custom display shelving and specialized equipment necessary for their retail business, attaching some pieces to the walls of the leased space. When the lease ends, who generally has the right to remove these items?

• A. The county assessor decides ownership of any attached business equipment
• B. The tenant, because items installed for conducting a trade or business generally remain the tenant's personal property and may be removed, provided the tenant repairs any resulting damage
• C. The landlord, because anything physically attached to a wall automatically becomes part of the real property
• D. Neither party may remove the items once physically attached, under any circumstances

87. A landlocked parcel has no direct access to a public road except by crossing a neighboring landowner's property. A court grants the landlocked owner the right to cross that neighboring land. What is this type of easement called?

• A. Easement in gross
• B. License
• C. Prescriptive easement
• D. Easement by necessity

88. A grantor conveys a life estate to a person, with the measuring life being a third party rather than the life tenant themselves. What is this type of life estate called?

• A. Remainder estate
• B. Estate for years
• C. Estate pur autre vie
• D. Fee simple defeasible

89. A property owner dies without a will and without any identifiable heirs. Under what legal doctrine does the property ultimately pass to the state?

• A. Adverse possession
• B. Escheat
• C. Police power
• D. Eminent domain

90. A city rezones a section of town to prohibit new commercial construction in a residential area, which restricts how affected owners can develop their land. Which government power does this action exercise?

• A. Eminent domain
• B. Taxation
• C. Police power
• D. Escheat

91. A homeowner association enforces a rule requiring all owners in a planned community to pay dues that fund maintenance of common areas like parks and pools, and refusal to pay can result in a lien against the owner's property. What best explains the legal basis for this lien?

• A. It is a form of eminent domain
• B. It arises from the recorded restrictive covenants and association bylaws the owner agreed to by purchasing in the community
• C. It arises automatically from government tax law
• D. It is a mechanic's lien for construction work performed on the property

92. A title search reveals that a previous owner granted a utility company the right to maintain power lines across a portion of the land, benefiting the utility company generally rather than any particular neighboring parcel. What kind of easement is this?

• A. Prescriptive easement
• B. Easement appurtenant
• C. Easement in gross
• D. Easement by necessity

93. A buyer wants to purchase the exclusive right to use a vacation condominium for two specific weeks each year, while other buyers hold rights to different weeks in the same unit. What form of ownership does this describe?

• A. Cooperative ownership
• B. Life estate
• C. Tenancy in common
• D. Timeshare ownership

94. A commercial building sits directly on the boundary line between two separately owned lots, with both owners sharing responsibility for maintaining the shared wall. What is this arrangement called?

• A. Party wall easement
• B. Leasehold estate
• C. Riparian right
• D. License

95. An owner transfers property to their son, but with the condition that if alcohol is ever sold on the premises, the property reverts back to the owner. What kind of estate has the son received?

• A. Life estate
• B. Leasehold estate
• C. Fee simple determinable
• D. Fee simple absolute

96. A buyer is comparing real property to personal property before closing on a home. Which characteristic most accurately distinguishes real property from personal property?

• A. Personal property cannot legally be sold or transferred
• B. Real property is always more expensive than personal property
• C. Real property includes land and things permanently attached to it, while personal property is generally movable and not permanently affixed
• D. Real property can only be owned by corporations

97. A seller wants to convey only whatever interest they might have in a parcel, without making any promise or warranty about the quality or validity of that title. Which conveyance instrument accomplishes this?

• A. Quitclaim deed
• B. Grant deed
• C. General warranty deed
• D. Special warranty deed

98. A buyer and seller sign a document where the buyer promises to pay a stated price and the seller promises to convey title, with both parties bound to perform. What type of contract is this?

• A. Option contract
• B. Executed contract
• C. Bilateral contract
• D. Unilateral contract

99. A property owner allows a landscaping company to continue mowing the lawn each week and paying the invoice each time, without ever signing a formal written agreement, based on a consistent pattern of conduct and mutual expectation of payment. What type of contract has most likely been formed?

• A. An executory contract that cannot yet be enforced
• B. A unilateral contract requiring only one party's promise
• C. A void contract, because nothing was ever put in writing
• D. An implied contract, formed by the parties' conduct rather than express written or spoken terms

100. A seller signs a listing agreement giving one broker the exclusive right to earn a commission no matter who ultimately produces the buyer, including the seller. What type of listing is this?

• A. Exclusive right to sell listing
• B. Open listing
• C. Exclusive agency listing
• D. Net listing

101. A buyer's written offer to purchase a home is accepted by the seller exactly as written, with no changes to any term. What is required for a valid contract to have been formed at that point?

• A. Mutual assent between competent parties agreeing to the same terms
• B. Only the buyer's signature is required to form a binding contract
• C. The offer must be re-signed by both parties' attorneys before it is binding
• D. A licensed broker must co-sign the agreement for it to be valid

102. A seller receives a signed offer and, without changing any terms, simply fails to respond within the time period stated in the offer for acceptance. What is the legal effect on the offer?

• A. The offer expires once the stated response period passes without acceptance
• B. The offer automatically becomes binding on the seller regardless of any response
• C. The buyer must sue the seller to enforce the unanswered offer
• D. The lack of response automatically converts the offer into a counteroffer

103. A buyer wants the right, but not the obligation, to purchase a property at a fixed price within a set time period, in exchange for paying the seller a nonrefundable fee now. What kind of agreement fits this goal?

• A. Option contract
• B. Right of first refusal
• C. Installment land contract
• D. Listing agreement

104. A tenant's lease gives them the right to be offered a chance to purchase the property on the same terms before the owner accepts any other buyer's offer. What is this right called?

• A. Option contract
• B. Exclusive listing
• C. Contingency clause
• D. Right of first refusal

105. A buyer's purchase contract states that closing will occur on or before June 1, and time is of the essence. What does this phrase generally mean for the parties?

• A. The contract becomes automatically voidable the moment June 1 arrives, regardless of performance
• B. The stated deadline is only a general suggestion with no real consequence
• C. Strict, punctual performance of the stated deadlines is required, and late performance can be treated as a material breach
• D. Either party may unilaterally extend the deadline without the other's consent

106. A minor enters into a contract to purchase a small parcel of land. Before reaching the age of majority, the minor decides to cancel the deal. What is the minor generally entitled to do?

• A. Convert the contract automatically into a lease rather than a sale
• B. Nothing, because minors are bound to real estate contracts the same as adults
• C. Disaffirm, or void, the contract, because minors generally lack full contractual capacity
• D. Nothing, because only a court, not the minor, can ever cancel the contract

107. A contract for the sale of land is signed by parties who both have full legal capacity, but the subject matter of the agreement is something illegal, such as an arrangement that violates fair housing law. What is the status of this contract?

• A. Voidable at either party's option, but enforceable until challenged
• B. Void, because a contract for an illegal purpose is not enforceable
• C. Valid but unenforceable only against the seller, not the buyer
• D. Automatically converted into an option contract instead of a sale

108. A seller under contract to sell a home dies before closing. Assuming the contract is otherwise valid and enforceable, what generally happens to the obligation to complete the sale?

• A. The contract automatically converts into a lease with the seller's estate
• B. The contract is automatically voided the moment the seller dies
• C. The buyer automatically forfeits the earnest money regardless of any default
• D. The obligation generally survives and passes to the seller's estate, which must still perform

109. A real estate sales contract is signed by both parties and fully performed, with the deed delivered and payment made at closing. How is this contract best classified at that point?

• A. Void contract
• B. Unilateral contract
• C. Executed contract
• D. Executory contract

110. A buyer's purchase offer includes a clause allowing the buyer to cancel and recover earnest money if a licensed inspector finds material defects the buyer does not accept. What kind of clause is this?

• A. Habendum clause
• B. Acceleration clause
• C. Merger clause
• D. Inspection contingency

111. A buyer deposits funds with a title company shortly after signing a purchase contract to demonstrate good faith and to compensate the seller if the buyer defaults without cause. What are these funds called?

• A. A loan origination fee
• B. A security deposit
• C. Earnest money
• D. A down payment

112. A real estate broker enters into a written agreement with a buyer to represent the buyer's interests exclusively in locating and purchasing a property. What is this type of agreement called?

• A. Option agreement
• B. Property management agreement
• C. Buyer representation agreement
• D. Listing agreement

113. A new buyer wants to take over a seller's existing mortgage loan, and the lender agrees in writing to release the original borrower entirely and accept the new buyer as the sole party responsible for repayment. What is this three-party substitution called?

• A. Subordination
• B. Assignment
• C. Rescission
• D. Novation

114. A tenant transfers their remaining rights and obligations under a lease to a new tenant, but the original tenant remains secondarily liable to the landlord if the new tenant defaults. What is this transfer called?

• A. Sublease only
• B. Novation
• C. Rescission
• D. Assignment

115. A buyer's purchase agreement states the buyer's obligation to close depends on securing approval for a mortgage loan within 30 days. If the buyer makes a good faith effort but cannot obtain financing within that period, what typically happens?

• A. The buyer automatically forfeits the earnest money regardless of the good faith effort made
• B. The seller may force specific performance regardless of the buyer's financing outcome
• C. The contract automatically converts into a lease-option arrangement instead
• D. The buyer may terminate the contract and recover the earnest money under the financing contingency

116. A seller agrees to convey a home to a buyer in exchange for the buyer's promise to pay the agreed purchase price at closing. What essential contract element does the buyer's promise to pay represent?

• A. Acceptance, the offeree's agreement to the exact terms proposed
• B. Consideration, something of value exchanged between the parties that supports the contract
• C. Legal purpose, meaning the contract's objective is not prohibited by law
• D. Capacity, the legal ability of the parties to enter into a contract

117. A signed purchase contract lists the property address, purchase price, and signatures of both parties, but omits any description of the earnest money terms. Is the contract necessarily invalid for this omission?

• A. Not necessarily, the essential elements of a valid contract can still be present even without an earnest money clause
• B. No, because contracts never require any form of consideration to be enforceable
• C. Yes, because every blank on a form contract must be filled in to form a valid contract
• D. Yes, earnest money terms are always legally required to form any valid contract

118. A buyer's agent explains that a contract signed under threat of physical harm to one of the parties would likely be treated as what?

• A. Voidable at the option of the coerced party, due to lack of genuine mutual assent
• B. Void only if a court separately finds fraud, since duress alone has no legal effect
• C. Automatically converted into an option contract instead of a sale
• D. Fully enforceable against the threatened party regardless of the threat made

119. After closing, a buyer tries to enforce a promise from the earlier purchase contract that was never mentioned in the final recorded deed. Under the doctrine of merger, what generally happens to contract promises that are not carried forward into the deed?

• A. The deed becomes void if it fails to restate every promise made in the earlier contract
• B. Most contract provisions merge into the deed at closing and are extinguished, except for certain terms the parties agree will survive
• C. The buyer may only ever enforce contract promises through the seller's title insurance company
• D. All contract promises automatically survive closing forever regardless of the deed's content

120. A borrower's monthly housing payment, including principal, interest, taxes, and insurance, is compared to their gross monthly income to determine loan eligibility. What is this ratio commonly called?

• A. The debt-to-income (back-end) ratio
• B. The capitalization rate
• C. The housing (front-end) qualifying ratio
• D. The loan-to-value ratio

121. A buyer discovers after signing a purchase contract that the seller intentionally and knowingly misrepresented a material fact about the property, such as falsely claiming a flooded basement had never flooded. What effect can this fraudulent misrepresentation have on the contract?

• A. The buyer has no available remedy because the contract was already fully signed
• B. The contract is automatically and fully void with no action required by the buyer
• C. The seller may still fully enforce the contract regardless of the misrepresentation made
• D. The contract becomes voidable at the buyer's option, potentially allowing rescission and or damages

122. A Texas sales agent represents a buyer but also owns a home improvement company that could profit from repairs recommended after an inspection. Under the agent's fiduciary duty of loyalty, what must the agent do regarding this conflict of interest?

• A. Refer the repair work only to a directly competing company instead
• B. Disclose the conflict of interest to the client and act in the client's best interest, not the agent's own financial interest
• C. Nothing, as long as the referral happens to be convenient for the client
• D. Automatically decline to represent the buyer in any transaction going forward

123. In Texas, a broker acts as an intermediary in a transaction where both the buyer and seller are represented by sales agents sponsored by the same broker. What best describes this intermediary's role?

• A. This arrangement is prohibited under all circumstances in Texas
• B. The broker automatically forfeits any commission whenever this arrangement occurs
• C. The broker may facilitate the transaction as a neutral intermediary between both parties, subject to specific written consent and statutory notice requirements
• D. The broker must represent only the seller once both parties are involved in the deal

124. A Texas real estate sales agent wants to receive a commission check directly from a buyer for helping close a transaction, bypassing their sponsoring broker. Under Texas license law, is this permitted?

• A. No, a sales agent may only be compensated for real estate activities through their sponsoring broker, not directly from clients or other parties
• B. Yes, but only when the transaction involves a cash purchase rather than financing
• C. Yes, as long as the agent reports the payment to the broker at a later time
• D. Yes, if the buyer and agent have a separate private side agreement about payment

125. A seller of residential property in Texas is generally required to provide a written notice disclosing known material defects and conditions of the property to a prospective buyer. What is this notice commonly called?

• A. Seller's Disclosure Notice
• B. Homeowners' association estoppel certificate
• C. Truth in Lending disclosure
• D. Closing Disclosure

126. A real estate agent tells homeowners in a neighborhood that property values will soon decline because families of a certain protected class are moving in, encouraging panic sales at artificially low prices. What prohibited Fair Housing Act practice does this describe?

• A. Puffing
• B. Redlining
• C. Steering
• D. Blockbusting

127. A lender refuses to make loans in a specific geographic area primarily because of the racial composition of the neighborhood, regardless of individual applicants' creditworthiness. What is this illegal practice called?

• A. Blockbusting
• B. Redlining
• C. Puffing
• D. Steering

128. A licensed sales agent in Texas advertises a listing using only their personal name and phone number, without mentioning their sponsoring broker anywhere in the ad. Under Texas advertising rules, is this generally compliant?

• A. Yes, as long as the advertisement appears on social media rather than in print
• B. No, advertising must generally include the broker's name, or a properly registered team name, so consumers know a licensed broker is responsible for the ad
• C. Yes, because only the seller's name is required to appear in any advertisement
• D. Yes, sales agents may advertise entirely independently of their sponsoring broker

129. A buyer believes a Texas-licensed broker misappropriated trust account funds and wants to seek compensation beyond what a civil judgment against the broker could recover. What state-administered fund may provide limited recovery in such cases?

• A. The Real Estate Recovery Trust Account, administered through the Texas Real Estate Commission
• B. The FDIC deposit insurance fund
• C. The buyer's own title insurance policy
• D. The state's general revenue fund

130. A consumer believes a Texas real estate licensee engaged in a deceptive or unfair practice, such as a false representation about a property's condition, in connection with a sale. Besides filing a complaint with the licensing agency, what other type of legal action might the consumer pursue based on such conduct?

• A. A workers' compensation claim against the licensee
• B. A federal antitrust claim against the licensee
• C. A claim under the Uniform Commercial Code for the sale of goods
• D. A civil claim under the Texas Deceptive Trade Practices Act

131. A Texas broker allows a buyer to make installment payments directly to the seller over several years for a vacant lot, without immediately transferring title, structured as a contract for deed. Under Texas law, why does this type of arrangement receive special statutory scrutiny and protections for the buyer?

• A. Because contracts for deed are entirely prohibited from being used in Texas
• B. Because only licensed attorneys are permitted to act as sellers in these arrangements
• C. Because contract-for-deed buyers historically lacked protections that traditional mortgage buyers had, so Texas law imposes specific disclosure, recording, and conversion requirements to protect them
• D. Because contracts for deed automatically transfer full legal title to the buyer at signing

132. A Texas sales agent gives a client detailed advice on how to interpret specific legal language in a complex contract clause and drafts custom contractual provisions not found on a standard promulgated form. What risk does this create for the agent?

• A. The agent risks engaging in the unauthorized practice of law, which is outside the scope of a real estate license
• B. The client automatically loses standing to enforce the resulting contract
• C. No risk at all, because agents are automatically authorized to practice law in real estate matters
• D. The agent risks losing only their errors and omissions insurance coverage

133. A newly licensed Texas sales agent wants to operate independently, listing and selling properties directly under their own name without being supervised by a broker. Under Texas license law, is this permitted?

• A. Yes, but only for transactions involving commercial rather than residential property
• B. No, a sales agent must be sponsored by and work under the supervision of a licensed broker to legally engage in real estate brokerage activity
• C. Yes, once the agent passes the licensing exam, sponsorship becomes entirely optional
• D. Yes, sales agents automatically qualify to act as brokers after one year of licensure

134. Before a Texas licensee begins representing a party in a residential transaction, the licensee provides a statutorily required written disclosure explaining the types of representation available. What is this document generally called?

• A. Seller's Disclosure Notice
• B. Closing Disclosure
• C. Information About Brokerage Services notice
• D. Truth in Lending disclosure

135. A licensed Texas broker is found to have commingled client trust funds with personal operating funds, a violation of license law. Which entity has authority to investigate the complaint and impose discipline such as suspension or revocation?

• A. The local county clerk's office
• B. The Texas Secretary of State
• C. The Texas Real Estate Commission
• D. The buyer's title insurance company

136. A Texas broker maintains a separate bank account exclusively for holding client earnest money and other trust funds, apart from the broker's own operating funds. What principle does this practice reflect?

• A. The fiduciary duty to properly account for and safeguard client funds by avoiding commingling
• B. A rule that applies only to commercial, not residential, real estate transactions
• C. A requirement that applies only when trust funds exceed a specific dollar threshold
• D. A purely optional bookkeeping preference with no underlying legal basis

137. A Texas sales agent's license lapses because the agent failed to complete required continuing education and renew on time. What is the most likely consequence for the agent's ability to practice?

• A. The agent generally cannot legally engage in licensed real estate brokerage activity, or earn a commission for such activity, until the license is renewed or reinstated
• B. The agent may keep working, but only on commercial rather than residential transactions
• C. The agent's sponsoring broker automatically becomes personally liable for all of the agent's past closed deals
• D. Nothing changes, because real estate licenses in Texas never expire

138. A Texas borrower defaults on a loan secured by a deed of trust, and the lender proceeds to foreclose without going through the court system, following the power-of-sale provision in the deed of trust. What is this foreclosure process called?

• A. Judicial foreclosure
• B. Non-judicial foreclosure
• C. Deed in lieu of foreclosure
• D. Strict foreclosure

139. A title company is preparing to close a Texas residential sale and researches the chain of title to identify any liens, encumbrances, or defects before issuing a policy. What is the primary purpose of the title insurance policy issued at closing?

• A. To guarantee the buyer a specific resale price for the property in the future
• B. To protect the buyer, and or the lender, against financial loss from title defects, undisclosed liens, or ownership disputes that existed before the policy was issued but were not discovered
• C. To eliminate any need for a boundary survey of the property
• D. To insure the physical condition of the structure against future damage

140. A Texas broker sponsors several sales agents and is legally responsible for supervising their conduct in real estate transactions. If a sponsored agent violates license law during a transaction, what exposure does the sponsoring broker typically face?

• A. The sponsoring broker has no responsibility whatsoever for a sponsored agent's conduct
• B. Only the agent, and never the sponsoring broker, can ever be disciplined by the licensing agency
• C. The sponsoring broker may face regulatory responsibility and discipline for failing to adequately supervise the sponsored agent
• D. The broker's license is automatically revoked regardless of the supervision efforts actually made

141. A property owner along a navigable Texas waterway wants to understand who generally owns the streambed and holds certain public access rights, versus who holds private rights along the bank. Under Texas water law principles, what generally distinguishes rights in navigable versus non-navigable waterways?

• A. Navigable waterways are generally treated as public, with the state holding the streambed and the public retaining certain access and use rights, while non-navigable waterways are more fully subject to private riparian rights of adjoining owners
• B. All waterways in Texas are treated as entirely state-owned, with no private riparian rights at all
• C. All waterways in Texas are treated as entirely private, with no public rights regardless of navigability
• D. Navigability has no legal significance to water rights anywhere in Texas

142. A Texas homebuyer signs a promissory note and a deed of trust rather than a traditional mortgage document to secure the loan. Which party holds legal title, or a power of sale, under a deed of trust arrangement while the loan is repaid?

• A. A neutral third-party trustee holds title, or a power of sale, on behalf of the lender until the loan is repaid, distinguishing it from a mortgage
• B. The lender holds full title outright, exactly as an owner would, until the loan is repaid
• C. The borrower holds no legal or equitable interest of any kind until the final payment is made
• D. The county government holds title in trust until the loan is fully repaid

143. A lender adds up a borrower's total monthly debt obligations, including the proposed housing payment plus car loans, credit cards, and other debts, and compares that total to gross monthly income. What is this broader ratio called?

• A. The loan-to-value ratio
• B. The debt-to-income (back-end) ratio
• C. The housing (front-end) ratio
• D. The capitalization rate

144. A buyer finances 80% of a home's purchase price with a loan and pays the remaining 20% in cash. What is the loan-to-value ratio in this transaction?

• A. 60%
• B. 80%
• C. 100%
• D. 20%

145. A buyer makes a down payment of less than 20% on a conventional loan. Based on standard lending practice, what is the buyer typically required to purchase to protect the lender against default?

• A. Private mortgage insurance
• B. Title insurance
• C. Homeowners hazard insurance only, with no additional coverage required
• D. Flood insurance, regardless of the property's flood zone designation

146. A loan's interest rate is fixed for an initial period and then adjusts periodically based on a financial index plus a margin. What type of loan is this?

• A. Fixed-rate mortgage
• B. Balloon mortgage
• C. Adjustable-rate mortgage
• D. Graduated payment mortgage

147. A loan requires small periodic payments for a period of time, followed by one large final payment that pays off the remaining balance. What type of loan structure is this?

• A. Adjustable-rate mortgage
• B. Balloon mortgage
• C. Graduated payment mortgage
• D. Fully amortized fixed-rate mortgage

148. A borrower's loan document contains a clause allowing the lender to demand full payment of the remaining loan balance immediately if the property is sold or title is transferred without the lender's consent. What is this clause called?

• A. Due-on-sale clause
• B. Subordination clause
• C. Acceleration clause triggered only by missed payments, not by a transfer of title
• D. Defeasance clause

149. A borrower fully repays a loan secured by a deed of trust. What document is recorded to clear the lien from the property's title records?

• A. A satisfaction of judgment only, with no separate lien release needed
• B. A release of lien (or deed of reconveyance)
• C. A new deed of trust replacing the original one
• D. A quitclaim deed from the lender back to itself

150. A new buyer wants to take over a seller's existing low-interest mortgage loan rather than obtaining new financing, with the lender's approval. What is this process called?

• A. Loan subordination
• B. Loan acceleration
• C. Loan assumption
• D. Loan defeasance

151. A seller finances a portion of a buyer's purchase by carrying a loan that wraps around the buyer's existing or new first mortgage, collecting a single combined payment and forwarding a portion of it to the original lender. What type of financing arrangement is this?

• A. Assumption financing
• B. Package mortgage
• C. Wraparound mortgage
• D. Blanket mortgage

152. A developer takes out a single loan secured by several separate parcels of land, with a release clause allowing individual parcels to be released from the lien as they are sold. What is this type of loan called?

• A. Package mortgage
• B. Blanket mortgage
• C. Wraparound mortgage
• D. Bridge loan

153. A settlement agent is reviewing a residential loan closing and wants to confirm compliance with the federal law prohibiting kickbacks and unearned referral fees between settlement service providers. Which federal law governs this?

• A. Fair Housing Act
• B. Truth in Lending Act
• C. Equal Credit Opportunity Act
• D. Real Estate Settlement Procedures Act

154. A lender denies a loan applicant based on the applicant's marital status rather than the applicant's creditworthiness. Which federal law most directly prohibits this type of lending discrimination?

• A. Truth in Lending Act (Regulation Z)
• B. Equal Credit Opportunity Act
• C. Fair Housing Act
• D. Real Estate Settlement Procedures Act