Part 7 Flashcards by Zara Khorasanchi

What is the purpose of Section 1101.160 regarding dispute resolution?
A) To allow TREC to settle lawsuits privately
B) To require license holders to hire attorneys for all disputes
C) To encourage mediation or negotiation with a trained individual
D) To limit TREC’s involvement in consumer complaints

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What does Section 1101.351 require in order to obtain a real estate license in Texas?
A) Must have two years of full-time work experience
B) Must pass a polygraph exam and credit check
C) Must be of good moral character and meet all education, experience, and exam requirements
D) Must close at least one real estate transaction under supervision

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Why is the inclusion of a criminal history review in licensing important under TRELA?
A) To comply with federal background check laws
B) To determine eligibility for federal housing subsidies
C) To verify good moral character and public trust
D) To discourage applicants from out-of-state

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How many classroom hours are required for a Texas real estate sales agent applicant?
A) 90 hours
B) 120 hours
C) 180 hours
D) 250 hours

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What is a broker applicant required to show in addition to education and exam completion?
A) Two years of property management experience
B) Four years of active licensure within the previous five years
C) A sponsorship agreement with three agents
D) Ten successful real estate transactions in a calendar year

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Which of the following best reflects a license holder’s fiduciary duty to a client?
A) Closing deals quickly to maximize commission
B) Maintaining confidentiality and acting in the client’s best interest
C) Offering discounts to first-time buyers
D) Promoting listings on as many platforms as possible

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Which of the following is not a listed ground for disciplinary action by TREC?
A) Misrepresentation or fraud
B) Failing to maintain required records
C) Practicing outside Texas without a license
D) Demonstrating incompetency or unworthiness

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What is one of the rights granted to a license holder facing disciplinary action under TRELA?
A) Automatic reversal of the penalty after 30 days
B) A public apology from TREC
C) A hearing before the State Office of Administrative Hearings (SOAH)
D) Mediation through the Texas Bar Association

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What factor does TREC consider when determining the amount of an administrative penalty?
A) The number of contracts the license holder has closed
B) Whether the violation was reported by a competitor
C) The seriousness and frequency of the violation
D) The agent’s length of time in the business

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What must a broker record for each trust account transaction?
A) The client’s full credit history
B) The brokerage’s tax ID
C) The source, purpose, and final use of the funds
D) The name of the escrow officer

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How soon must a broker deposit trust money after receiving it, according to TRELA guidelines?
A) By the end of the month
B) Within 24 hours
C) Within three banking days
D) Within one week

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According to TRELA, what must all forms of advertising by a license holder include?
A) A photo of the agent
B) The license holder’s phone number
C) The name of the broker or brokerage firm
D) The license holder’s email address

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. Where can brokers and agents access the full text of TREC’s administrative rules when needed?
A) From the IRS website
B) Only by written request to the State Bar of Texas
C) Through links available on the TREC website
D) By attending TREC’s annual ethics summit

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Under the DTPA, what is considered a reasonable consumer expectation from a real estate professional?

A) Knowing the full legal history of a property
B) Being able to immediately locate any boundary line by memory
C) Knowing how to find accurate information such as reading a property survey
D) Guaranteeing the future value of a property

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Which of the following best describes when a real estate agent may be liable under the DTPA?

A) When the buyer fails to inspect the property
B) When the agent unknowingly shares outdated MLS information
C) When the agent makes an unverified representation about a property that turns out to be incorrect
D) When the buyer’s lender denies financing due to low credit score

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A seller knows about a foundation issue that caused visible cracks in the wall but does not disclose it. The buyer sees the crack but does not ask about it. Who is legally responsible under the DTPA?

A) The buyer, for not asking questions
B) No one, because the defect was visible
C) The seller and their sales agent, for not disclosing the known issue
D) The home inspector, for missing the defect

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n a DTPA claim, how does “reasonable diligence” affect the buyer’s right to damages?

A) It fully protects the seller if the issue was visible
B) It excuses the seller’s failure to disclose defects
C) It applies to the buyer’s actions, but does not excuse the seller or agent’s duty to disclose
D) It requires buyers to inspect the property or waive their right to sue

A real estate agent fails to disclose they hold a license while buying property from a seller who doesn’t understand market values. Which best describes this under the DTPA?

A) An acceptable omission if the sale is fair
B) A breach of implied warranty
C) An unconscionable action
D) A minor procedural issue, not covered by DTPA

What distinguishes an intentional act from a knowing act under DTPA?

A) Intentional acts involve repetition; knowing acts do not
B) Intentional acts involve specific intent to mislead or cause reliance
C) Knowing acts are more severe and punished with treble damages
D) There is no difference; both terms mean the same

Which of the following scenarios would most likely qualify as fraud under the DTPA?

A) An agent mistakenly gives wrong school district info from memory
B) An agent hides known flood damage and tells the buyer it’s a dry home
C) An agent forgets to mention the home is near a landfill
D) An agent tells a buyer to verify the roof age with a third party

A real estate agent estimates the square footage of a home without verifying the number and includes it in the listing. The buyer relies on that info and later finds it’s incorrect. What has occurred?

A) Fraud, because the buyer suffered damage
B) Misrepresentation by omission
C) Misrepresentation by commission
D) No violation, because the number was close enough

Which of the following best represents misrepresentation by omission in a real estate transaction?

A) An agent tells a buyer the home was remodeled recently, but doesn’t mention it was done without permits.
B) An agent gives the wrong square footage based on a typo in the MLS listing.
C) An agent recommends the buyer get an independent inspection before purchasing.
D) An agent overstates the lot size based on outdated appraisal records.

hich of the following best explains how a real estate sales agent can be found liable under the DTPA for a property defect?

A) Only if the buyer proves the agent intentionally hid the defect
B) Only if the seller failed to mention the defect in the disclosure
C) If the agent either knew about the defect or reasonably should have known about it
D) If the buyer did not hire an inspector before closing on the property

A buyer signs an “as-is” agreement for a property and later finds severe foundation damage that the seller knew about but didn’t disclose. Under DTPA, what is true?

A) The buyer waived their right to sue by accepting the property “as-is”
B) The seller is still liable because known defects must be disclosed
C) The buyer cannot sue unless they hired an inspector
D) The agent is only liable if they made the repairs themselves

In a DTPA case, which of the following cannot be used as a legal defense by a seller or agent? A) The buyer did not request an inspection B) The buyer signed a waiver before the sale C) The agent reasonably believed the property had no defects D) The seller disclosed everything known in writing

Why should a license holder avoid interpreting or explaining a home inspector’s report? A) Because the inspector is liable for their own report and opinions B) Because it’s part of the agent’s duty to provide their own assessment C) Because buyers are not allowed to contact inspectors directly D) Because doing so gives the appearance of fraud

A buyer threatens a DTPA lawsuit after discovering a hidden leak post-closing. The seller had no knowledge of the leak, and it wasn’t mentioned in the inspection report. What is the most likely outcome? A) The seller is automatically liable for nondisclosure B) The buyer has no case because they signed an “as-is” agreement C) The seller is likely protected because the issue was latent and unknown, and the home was inspected D) The buyer is entitled to punitive damages for omission

Which of the following is the best example of a valid DTPA defense using an authoritative source? A) The agent quoted a contractor’s opinion from memory B) The agent relied on square footage listed in county tax records C) The agent guessed based on comps in the neighborhood D) The agent told the buyer not to worry about verifying roof condition

. Why is it important that a real estate agent does not assist the seller in completing the disclosure form? A) Because it voids the sale B) Because it makes the form legally invalid C) Because it can shift liability to the agent if anything is omitted or misstated D) Because the buyer may rely only on verbal disclosure

Which of the following statements BEST describes the primary legal distinction between a real estate trade association and a licensing authority? A. A trade association enforces state licensing laws, while a licensing authority provides voluntary marketing tools to its members. B. A licensing authority sets ethical standards for agents, while a trade association disciplines agents for breaking licensing rules. C. A trade association provides member services like education and lobbying, while a licensing authority is a government entity that enforces legal compliance. D. Both trade associations and licensing authorities can revoke a real estate license, but only the trade association can impose fines for ethics violations.

A local real estate association updates its Code of Ethics. What legal effect does this have? A. The new code automatically becomes part of the state real estate license law. B. Only members of the association are bound by it, and violations may lead to internal penalties. C. All practicing agents in the region must comply, regardless of membership. D. It replaces the ethical standards set by the state licensing agency.

Why might a real estate agent choose to join a trade association even if it’s not legally required? A. To gain direct access to enforceable state disciplinary authority B. To meet the minimum legal requirements for license renewal C. To access benefits like MLS, legal forms, and networking events D. To reduce the number of continuing education hours required by law

Which of the following is NOT typically a function of a local or national real estate association? A. Negotiating commission rates between competing brokerages B. Hosting continuing education and training seminars C. Advocating for real estate-friendly legislation D. Distributing housing market research and statistics

Which of the following scenarios illustrates a limitation of real estate associations in enforcing agent conduct? A. An agent violates the association's Code of Ethics and is fined and reported to the state licensing board. B. An agent violates state law but cannot be disciplined by the association because they are not a member. C. An association revokes a non-member agent's license for failing to complete required training. D. An agent fails to meet MLS standards and is banned from practicing real estate in the state.

Which of the following pairs correctly matches a real estate association with its primary focus? A. NAIOP – Provides MLS access and fair housing advocacy for Latino agents B. IREM – Supports the professional development of commercial real estate developers C. AREAA – Promotes homeownership in Asian American communities D. WCR – Regulates licensing for female brokers at the state leve

Which of the following statements accurately describes the structural relationship between real estate associations in Texas? A. Local associations like GFWAR and SABOR operate independently of both state and national organizations. B. Texas REALTORS® (TXR) oversees all real estate licensing activity in the state as part of NAR’s regulatory branch. C. State and local associations in Texas operate under the umbrella of NAR, with TXR acting as the state-level affiliate supporting local associations like GFWAR and SABOR. D. The San Antonio Board of REALTORS® (SABOR) reports directly to the national government rather than any real estate association.

What is the primary role of local associations such as GFWAR or SABOR in relation to their members? A. They write housing legislation and enforce disciplinary action against unlicensed activity. B. They provide federal-level legal protection and access to national lobbying funds. C. They offer localized training, education, and information tailored to their specific region's market. D. They certify license holders and collect state taxes from brokerage firms.

Which of the following BEST explains the role of Texas REALTORS® (TXR) within the broader National Association of REALTORS® (NAR) structure? A. TXR manages all MLS platforms in Texas independently from NAR. B. TXR is the licensing authority for Texas agents and handles all renewals and penalties. C. TXR is the state-level NAR affiliate in Texas, supporting professional development, advocacy, and services for members statewide. D. TXR is a third-party trade association with no official connection to NAR or local boards.

Which of the following best describes how NAR’s research and data functions influence real estate professionals? A. They help NAR agents interpret state licensing exams and pass them on the first try. B. They guide personal branding and social media strategy, but are not relevant to housing market analysis. C. They provide critical insights into consumer behavior and market trends, helping REALTORS® make informed business decisions. D. They are primarily used to advertise NAR’s technology products to foreign investors.

Which NAR initiative directly supports members seeking to conduct global real estate transactions? A. The REALTOR® Political Action Committee (RPAC) B. The Code of Ethics certification for cross-border compliance C. NAR’s international partnerships and relationships with global real estate organizations D. The MLS system integration program with national governments