Texas Real Estate Exam Practice

Question 1 of 10

Property DisclosureEasy

Is a transfer by a fiduciary (such as an estate executor) in the course of administering an estate generally exempt from the disclosure requirement?

AYes, but only for estates valued under a set amount

BNo, executors must always provide full disclosure

CNo, this exemption applies only to trustees, never executors

DYes, this kind of fiduciary transfer is generally exempt

Explanation

Transfers made by a fiduciary administering an estate are generally exempt from the disclosure requirement, since the fiduciary typically lacks the prior owner's direct knowledge of the property — it isn't a universal executor duty, isn't gated by estate value, and the exemption isn't limited to only trustees.

Question 2 of 10

Real Property & OwnershipMedium

Which form of ownership gives a property owner the most complete bundle of rights, with the fewest limitations?

AAn easement interest

BA leasehold estate

CFee simple absolute

DA life estate

Explanation

Fee simple absolute is the most complete form of ownership recognized in real property law — a life estate ends with a measuring life, a leasehold is a tenant's possessory interest rather than ownership, and an easement is only a limited right to use land someone else owns.

Question 3 of 10

Real Estate CalculationsMedium

A buyer is purchasing a $250,000 home with a $50,000 down payment. What is the loan-to-value (LTV) ratio?

A25%

B20%

C80%

D100%

Explanation

Loan amount is $250,000 − $50,000 = $200,000. LTV = loan ÷ value = $200,000 ÷ $250,000 = 80%. Common errors: dividing the down payment by the loan amount instead of the price ($50,000 ÷ $200,000 = 25%), or calculating the down-payment percentage (20%) instead of the loan-to-value percentage — the two are complements of each other.

Question 4 of 10

Real Estate FinancingMedium

What does the loan-to-value (LTV) ratio measure?

AThe loan amount as a percentage of the property's value

BThe buyer's monthly income as a percentage of the payment

CThe total interest paid over the full life of the loan

DThe property's value compared to nearby comparable sales

Explanation

LTV compares the loan amount to the property's appraised value (loan divided by value), which lenders use to gauge risk — it isn't an income-to-payment ratio (that's closer to a debt-to-income calculation), isn't a total-interest figure, and isn't a comparable-sales analysis.

Question 5 of 10

TREC Rules & StandardsMedium

Can a licensed Texas sales agent operate independently, without a sponsoring broker?

AYes, with extra continuing education

BYes, for transactions under a set dollar amount

CYes, after holding a license two-plus years

DNo, a sales agent must always be sponsored

Explanation

A sales agent's license only permits them to practice under a sponsoring broker — there's no experience threshold, transaction-size exception, or amount of continuing education that allows independent practice. Only a broker's license allows that.

Question 6 of 10

Property DisclosureMedium

Which of these is a commonly recognized exemption from the Texas Seller's Disclosure Notice requirement?

AA sale priced above the local median

BA sale where the buyer has an agent

CA transfer by foreclosure or trustee's sale

DA sale that closes within 30 days of listing

Explanation

Foreclosure and trustee-sale transfers are among the recognized exemptions, since the seller in that situation typically isn't the prior owner with knowledge of the property's condition. Buyer representation, sale price, and how quickly a deal closes have no bearing on whether the disclosure requirement applies.

Question 7 of 10

Real Estate CalculationsMedium

Annual property taxes are $3,650. At closing on day 100 of the year (365-day year), how much is the seller's share of taxes, assuming the seller pays for the days they owned the property this year?

A$2,650

B$1,000

C$1,650

D$3,650

Explanation

Daily rate = $3,650 ÷ 365 = $10/day. The seller owned the property for the first 100 days: 100 × $10 = $1,000. Common errors: using 165 days instead of 100 ($1,650), or calculating the buyer's remaining share (265 days = $2,650) instead of the seller's.

Question 8 of 10

Federal Real Estate LawMedium

What does the Americans with Disabilities Act (ADA) generally require, distinct from the Fair Housing Act's disability protections?

AThat every private residence must be retrofitted for accessibility

BThat landlords may screen out tenants with disabilities

CThat agents complete a specific disability-related certification

DAccessibility in public accommodations and commercial facilities

Explanation

The ADA generally addresses accessibility in public accommodations and commercial facilities (offices, retail space), which is a different focus from the Fair Housing Act's protections against disability discrimination in housing — it doesn't mandate retrofitting every private home, it certainly doesn't authorize screening out tenants (which would itself be illegal discrimination), and it doesn't create a licensing-style certification requirement.

Question 9 of 10

Closing & FinanceMedium

At closing, how are property taxes for the current year typically handled between buyer and seller?

AProrated by each party's ownership period

BPaid entirely by the buyer, regardless of date

CDeferred untouched to the following tax year

DPaid entirely by the seller, regardless of date

Explanation

Property taxes are typically prorated at closing, so each party effectively covers taxes only for the portion of the year they actually owned the property — not dumped entirely on one side, and not simply deferred untouched to next year.

Question 10 of 10

Real Estate FinancingMedium

What does a promissory note represent in a financed real estate purchase?

AThe lender's promise to approve any future refinance

BThe document that physically transfers title to the buyer

CA government guarantee that the loan will be repaid

DThe borrower's personal promise to repay the debt

Explanation

The promissory note is the borrower's personal, signed promise to repay the loan under its stated terms; the deed is what transfers title, not the note. It's not a promise about future refinancing, and it isn't a government guarantee (that's a separate feature of certain loan programs).

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