Texas Real Estate Sales Agent Exam Study Guide

The Texas Real Estate Sales Agent licensing exam is administered by Pearson VUE and is split into two independently scored parts: a National section and a State section. You must pass both parts to become licensed, and each part is scored on its own — a strong National score cannot compensate for a failing State score.

Key numbers to know before test day

• Time limit: You are given 240 minutes to complete the examination.
• National passing score: You must answer 56 questions correctly on the National examination.
• State passing score: You must answer 28 questions correctly on the State examination.
• Exam fee: The fee is $43 for a Sales examination.

Because the National and State portions are graded separately, build your study plan to give full attention to both. The bulk of the tested material — agency, contracts, ownership, finance, fair housing, and valuation — is covered in the sections below.

The Texas Real Estate Sales Agent licensing exam is administered by Pearson VUE and is the final knowledge hurdle between completing your qualifying education and receiving your license from the Texas Real Estate Commission (TREC). The exam is split into two independently scored parts: a National portion covering principles that apply across the United States, and a State portion covering Texas-specific law, agency, and practice.

Key exam facts at a glance

• Total time: 240 minutes for the full exam.
• Exam fee: $43 for the Sales examination.
• To pass: answer 56 questions correctly on the National portion and 28 questions correctly on the State portion.

Because the two portions are scored separately, you must pass both to be successful. If you pass one portion and fail the other, you generally only need to retake the portion you did not pass — a strong reason to gauge your readiness on each section independently as you study.

An agency relationship arises when a principal authorizes an agent to act on the principal's behalf in dealings with third parties. This relationship is the foundation of nearly everything a sales agent does, and it generates a set of strict fiduciary duties owed to the principal (the client).

The OLD CAR duties

Fiduciary duties are commonly summarized by the acronym OLD CAR: Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care and diligence. A few carry heavy exam weight:

• Loyalty requires the agent to place the principal's interests above the agent's own and above all others.
• Confidentiality survives termination of the agency and forbids revealing information that would harm the principal's bargaining position — so a listing agent still cannot reveal a former seller's lowest acceptable price after closing.
• Accounting requires depositing client funds in a separate trust or escrow account and never commingling them with the broker's own funds.

Clients vs. customers

Agents owe customers honesty and fair dealing and must disclose known material latent defects, but do not owe customers fiduciary duties. Distinguishing the two is a frequent exam trap: fiduciary loyalty and confidentiality run only to the principal.

Types of agency

A special agent has limited authority for a single transaction; a general agent may bind the principal in a range of matters, such as a property manager. Dual agency — representing both buyer and seller in the same transaction — is permitted only with the informed written consent of both parties, because it creates an inherent conflict with the duties of loyalty and full disclosure.

You have 240 minutes to complete the exam, which must be divided across both the National and State portions. Budgeting your time deliberately prevents the common failure mode of rushing the second portion after over-investing in the first.

A practical pacing approach

• Treat the National portion as the larger time commitment, since it requires the most correct answers (56) to pass.
• Reserve a proportional block for the State portion, which requires 28 correct answers.
• Flag difficult questions and return to them rather than stalling — a single hard item is rarely worth several minutes when other points are still on the table.
• Leave a buffer at the end of each portion to review flagged questions.

With 240 minutes total, you have roughly four hours of testing capacity. Practicing full-length timed simulations beforehand helps you internalize this pace so the real exam feels familiar rather than rushed.

A valid real estate contract requires four essential elements: mutual assent (offer and acceptance), consideration, legally competent parties, and a lawful object. If any one is missing, the agreement is not a valid contract.

Offer and acceptance

Acceptance must be unqualified, so any material change to the terms operates as a counteroffer that rejects and extinguishes the original offer. Practically, this means a buyer whose offer is countered can no longer force the seller to honor the original terms — the original offer is gone. An offer may also be revoked any time before acceptance is communicated.

The Statute of Frauds

The Statute of Frauds requires contracts for the sale of real estate, and leases longer than one year, to be in writing and signed by the party to be charged to be enforceable. An oral land-sale agreement is therefore unenforceable in court even if both sides agreed.

Void, voidable, and unenforceable

A contract lacking a required element is void; one a party may disaffirm, such as one signed by a minor, is voidable; and one valid but not enforceable in court, such as an unwritten land-sale agreement, is unenforceable. Keep these three categories straight — the exam tests the distinctions directly.

Contingencies and remedies

Contingencies are conditions that must be satisfied before a party is obligated to perform, commonly financing, inspection, and appraisal contingencies. When a party breaches, remedies include specific performance, which compels conveyance because land is deemed unique, and liquidated damages clauses that let the seller retain the earnest money as the agreed measure of the buyer's default.

The Texas Sales Agent exam uses a two-part passing standard. Rather than a single overall percentage, each portion carries its own correct-answer requirement:

• National examination: 56 questions answered correctly.
• State examination: 28 questions answered correctly.

What this means for your study plan

Because the National requirement (56 correct) is twice the State requirement (28 correct), the National portion carries the heavier weight in raw terms and typically deserves proportionally more preparation time. However, the State portion is where Texas-specific law lives — TREC rules, the Texas Real Estate License Act, agency disclosure, and promulgated contract forms — and many candidates underestimate it precisely because it is smaller. Give both portions dedicated, focused study rather than assuming the smaller portion will take care of itself.

Since the portions are scored independently, aim comfortably above each threshold in your practice tests so that exam-day nerves and a few unexpected questions don't push you below the line.

Ownership interests in real property range from the most complete to the limited. The fee simple absolute is the highest and most complete form of ownership, freely inheritable and transferable. A life estate, by contrast, lasts for the duration of a named person's life, after which title passes to a remainderman or reverts to the grantor.

Deeds and their requirements

To be effective, a deed must be in writing, name the parties, contain a legal description, include a granting clause, and be signed by the grantor and delivered and accepted. The type of deed determines how much protection the buyer receives:

• A general warranty deed offers the greatest protection because the grantor warrants title against all defects arising at any time.
• A quitclaim deed carries no warranties and conveys only whatever interest the grantor may have — useful for clearing clouds on title but weak protection for a buyer.

Recording and lien priority

Recording the deed in the public land records gives constructive notice to the world and establishes priority. Priority normally follows recording order, but there is a key exception: property tax liens and special assessments generally take priority over all other liens regardless of when they were recorded.

Encumbrances

An easement appurtenant benefits an adjoining dominant tenement, burdens the servient tenement, and runs with the land — meaning it transfers automatically to new owners of the affected parcels.

The Sales examination fee is $43, paid to Pearson VUE when you schedule your appointment. This fee covers a single exam sitting.

Budgeting for the process

If you need to retake one or both portions, expect to pay the exam fee again for each attempt. Because the National and State portions are scored separately, a candidate who passes one portion but not the other typically retakes only the failed portion — but the $43 exam fee still applies to the retake sitting. Building realistic expectations here helps you plan both your budget and your study schedule so that you sit for the exam only when you are genuinely ready.

Beyond the exam fee itself, remember that licensure involves additional costs outside this exam — qualifying education, application fees to TREC, and background/fingerprinting — so the $43 is one line item in a larger process.

A mortgage loan involves a promissory note evidencing the debt and a mortgage or deed of trust that pledges the property as security. Whether the borrower or lender holds title during the loan depends on the state: in a title-theory state the lender holds legal title until the debt is paid, while in a lien-theory state the borrower holds title and the lender holds only a lien.

Loan clauses and costs

• The acceleration clause lets the lender declare the entire balance due upon default.
• One discount point equals one percent of the loan amount and is prepaid interest that buys down the interest rate.
• Private mortgage insurance is typically required on conventional loans when the down payment is less than twenty percent.

Loan types

Conventional loans are not government-backed; FHA loans are insured by the FHA and allow low down payments; and VA loans are guaranteed for eligible veterans and can permit no down payment.

Federal disclosure laws

Two federal statutes dominate the exam. RESPA governs federally related mortgage loans, prohibits kickbacks and unearned referral fees, and requires the Loan Estimate and Closing Disclosure. TILA, implemented by Regulation Z, requires disclosure of the APR and total finance charge and grants a three-day right of rescission on certain refinances of a principal residence. A useful distinction: RESPA targets settlement-cost abuses, while TILA targets truthful disclosure of the cost of credit.

The federal Fair Housing Act prohibits housing discrimination based on seven protected classes: race, color, religion, national origin, sex, familial status, and disability. Memorize all seven — questions frequently ask you to identify which characteristic is (or is not) protected.

Prohibited practices

• Steering is directing buyers toward or away from neighborhoods based on a protected class.
• Blockbusting is inducing sales by suggesting a protected group is moving in; redlining is denying loans in certain areas.

Note an important overlap: discrimination based on race, established under the Civil Rights Act of 1866, has no exemptions — so even transactions otherwise exempt from the Fair Housing Act remain liable for racial discrimination.

Valuation and appraisal

Market value is the most probable price a property should bring in a competitive and open market under fair-sale conditions. Appraisers estimate it using the three approaches to value: the sales comparison approach, the cost approach, and the income approach. Underlying all of them is the principle of substitution, which holds that a buyer will pay no more than the cost of an equally desirable substitute.

Property management

In property management, the manager is a general agent who owes fiduciary duties to the owner while maximizing net operating income and preserving the property's value.