Real Estate Practice: Texas Real Estate Exam Guide

Real Estate Practice is where the exam asks, "What should the broker or license holder do next?" The facts may involve a listing, a property manager holding rent, a discriminatory advertisement, a cold call, a conversation between competing brokers, or a client asking for legal language.

Do not solve these questions by looking for the strictest-sounding answer. First identify the official subtopic. Then ask who is acting, who is protected, and what conduct changes the result. After this guide, work the Real Estate Practice practice questions and read every rationale.

What Pearson VUE tests in Real Estate Practice

The current outline assigns exact item counts to all four subtopics. The concepts in the third column below are Pearson's, not an estimated topic list.

Pearson publishes the 5, 3, and 2 cognitive totals for the entire area. It does not promise which concept will receive a particular question type. The national portion also includes five unscored pretest items that look like scored items, so answer every question.

Keep the syllabus boundary clean

Several Texas state-law topics overlap daily brokerage practice but are not listed inside these 10 national items. General TREC advertising rules and trust-account discipline sit under Standards of Conduct on the Texas state portion. The DTPA and landlord-tenant issues sit under Special Topics. Trust-money handling still belongs here when the national question is about a property management agreement, and misleading conduct can still support a risk-management question. The distinction is about where Pearson formally places the topic, not whether the conduct matters.

Subtopic A: broker responsibilities

Subtopic A is narrower than its title sounds. Its two named concepts are competence and unauthorized practice of law.

Practice within your expertise

The national rule is simple: a real estate license does not make a person qualified in every market, property type, or professional field. A license holder should work within demonstrated competence, obtain qualified help, or refer the issue to the right professional.

Texas makes that principle concrete in 22 TAC Section 531.4. A license holder must:

• know local market issues and conditions in the geographic area where services are provided;
• stay informed about national, state, and local real estate developments;
• exercise judgment and skill in brokerage activities; and
• understand the characteristics of the specific type of real estate being brokered.

An agent familiar with suburban resales is not automatically competent to advise on a working ranch, mineral interests, a complex commercial lease, structural engineering, tax consequences, or environmental remediation. The best exam answer is usually to disclose the limit and bring in the broker or an appropriate specialist.

Do not cross into legal practice

Texas 22 TAC Section 537.11 separates permitted form completion from legal advice.

If a buyer asks the agent to invent an escalation, appraisal, or contingency clause, the tested response is to recommend legal counsel. Knowing what the client wants does not authorize the agent to draft the legal mechanism.

Exam split: an unfamiliar market or property type usually tests scope of expertise. A request to interpret legal effect or write custom contract rights usually tests unauthorized practice of law.

Subtopic B: brokerage agreements

This is one of the two heaviest subtopics at three items. It includes agreements with sellers, buyers, landlords, and tenants.

Seller representation and listing types

An MLS is not another agency relationship. It is a cooperative system through which participating brokers share listing information.

Texas restricts net listings under 22 TAC Section 535.16(b). The principal must require the arrangement and appear familiar with current market values. The agreement must also assure the principal at least the desired price and cap the broker's commission at a specified maximum.

Texas also requires a definite termination date in most brokerage-service contracts under TRELA Section 1101.652(b)(12). A contract to perform property management services is expressly excepted from that disciplinary provision.

Buyer agreements changed in 2026

Effective January 1, 2026, TRELA Section 1101.563 requires a written agreement when a license holder performs brokerage for a prospective buyer of residential real property. The agreement must be in place before a showing, or before presenting an offer if no property will be shown.

The agreement must state the services, termination date, exclusivity status, representation status, and the amount or rate of broker compensation and how it will be determined. It must conspicuously disclose that broker compensation is not set by law and is fully negotiable.

A non-representation agreement used only for a showing must be nonexclusive and may last no more than 14 days. If the license holder later performs additional brokerage services, a separate agreement is required. This is why "a written agreement is required" does not always mean "the buyer must hire that agent as an exclusive representative."

Property management agreements

Pearson specifically names four management functions:

1. accounting for funds;
2. maintaining the property;
3. leasing the property; and
4. collecting rents and security deposits.

The written agreement should define authority, duties, reporting, maintenance limits, leasing authority, compensation, duration, and termination. A manager is an agent of the owner and must follow the agreement while protecting the owner's interests.

Texas treats rent and security deposits held for others as trust money under 22 TAC Section 535.146. A sales agent cannot maintain the trust account and must deliver trust money to the sponsoring broker immediately. Unless the principals agree otherwise in writing, the broker must place the money in a trust account or deliver it to an authorized escrow agent by the close of business on the second working day after receipt.

Subtopic C: Fair Housing

Fair Housing also carries three items. Memorizing the seven federal classes is necessary, but scenario questions are usually decided by the conduct.

The federal Fair Housing Act protects race, color, religion, national origin, sex, familial status, and disability. Texas Property Code Chapter 301 substantially mirrors those protections. Texas also treats discrimination based on hair texture or a protective hairstyle associated with race as race discrimination under Section 301.0045.

Match the act to the name

Exemptions are narrower than the shortcuts

The federal and Texas acts include limited exemptions. The two most tested are a qualifying owner transaction involving a single-family house and the owner-occupied building of no more than four units, often called the Mrs. Murphy exemption.

Keep three limits straight:

• The no-broker condition belongs to the single-family exemption. It is not written into the owner-occupied four-unit exemption.
• Discriminatory advertising is not protected by these exemptions.
• 42 U.S.C. Section 1982 separately prohibits racial discrimination in property transactions, even when a Fair Housing Act exemption might otherwise apply.

Do not let an owner's claimed exemption become the agent's excuse. A Texas license holder is directly restricted in brokerage services by Property Code Section 301.027 and in advertising by Section 301.022.

Fair Housing Act or ADA?

Use the location and activity:

• A house, apartment, residential sale, residential lease, or housing rule points first to the Fair Housing Act.
• A brokerage office or apartment leasing office open to the public can be a Title III public accommodation under the ADA.
• The laws can overlap. A rental office may be covered by the ADA while the apartments and tenant-selection process are covered by fair housing law.

A tenant's request for an exception to a rule because of disability is usually a reasonable accommodation. A request to make a physical change to the dwelling is usually a reasonable modification.

Subtopic D: risk management

Risk management is only two items, but Pearson names six different concept families. Study the distinctions, not a long list of penalties.

Supervision and vicarious liability

Supervision belongs in subtopic D, not subtopic A. A broker can delegate supervisory tasks, but not the broker's overall responsibility. Texas 22 TAC Section 535.2 requires written authorization of a sponsored sales agent's activities and keeps overall supervision with the broker.

Vicarious liability means one person or business can be held responsible for another person's conduct because of their relationship. Texas adds a direct rule in TRELA Section 1101.803: a broker is liable to TREC, the public, and the broker's clients for conduct by a sales agent associated with or acting for the broker. "The broker did not know" is not the escape hatch many candidates expect.

Privacy and Do Not Contact

Protect consumer information, restrict access to people who need it, follow applicable retention and disposal rules, and do not assume a lead form authorizes every type of outreach.

For live outbound telemarketing covered by the FTC's Telemarketing Sales Rule:

• calls to a person's home generally must stay between 8 a.m. and 9 p.m. local time unless the person consented otherwise;
• the caller must use a National Do Not Call Registry version downloaded no more than 31 days before the call;
• a transaction-based established business relationship can last 18 months;
• an inquiry or application can support an established business relationship for 3 months; and
• the consumer's company-specific request not to be called overrides the established-business-relationship exception.

Those rules do not make every text, prerecorded call, or automated call lawful. TCPA consent requirements depend on the technology, content, and facts. Commercial email has a separate CAN-SPAM framework, including accurate headers and subject lines, a valid physical postal address, a clear opt-out method, and honoring opt-outs within 10 business days.

Antitrust

The exam often uses four labels: price fixing, market allocation, group boycott, and tying. The safest decision rule is independence.

• A brokerage may set and quote its own fee.
• Broker compensation is negotiable with the client.
• Competing firms may not agree on commission rates, fee floors, customers, or territories.
• A verbal understanding, nod, or coordinated practice can be an agreement. A signed contract is not required.

Horizontal price fixing and naked customer or market allocation among competitors are per se violations and can be criminal. Group-boycott and tying questions can require more legal analysis in real life, so do not write every refusal to deal or bundled service off as automatically per se illegal. On the exam, look for competitors acting together to suppress competition.

Fraud, misrepresentation, and insurance

Fraud involves intentional deception. Misrepresentation is a false statement of material fact and may be intentional or negligent. Puffing is subjective sales opinion, such as "the best view on the block." If a statement can be verified, such as roof age, square footage, or prior flooding, treating it as mere opinion is risky.

Insurance does not erase the underlying duty, and exclusions and policy terms matter. For exam purposes, match the professional mistake to E&O and the physical injury or property-damage claim to general liability.

A five-step way to answer scenario questions

1. Name the subtopic. Competence or legal drafting is A. Agreements and management are B. Housing discrimination is C. Supervision, outreach, antitrust, misrepresentation, and insurance are D.
2. Identify the actor. Broker, sales agent, property manager, owner, lender, insurer, or competing firm.
3. Find the decisive fact. Protected class, custom legal language, listing type, competitor agreement, public office, or professional error.
4. Remove the noise. Good intentions, a later refund, lack of a written conspiracy, or an owner's request rarely cures prohibited conduct.
5. Choose the narrow answer. Prefer the option that identifies the exact duty or violation instead of a broad statement that happens to sound cautious.

Original practice questions

These questions are original study items and are not copied from the licensing exam.

Question 1. A residential agent is asked to market a specialized industrial property in a city the agent does not know. What is the best response?

• A) Accept because a real estate license covers every property type
• B) Accept and rely on the seller for all technical information
• C) Disclose the limits of the agent's competence and obtain qualified assistance or refer the matter
• D) Draft a disclaimer that transfers all responsibility to the buyer

Answer: C. Scope of expertise is the tested issue. Texas Section 531.4 requires knowledge of the local market and the specific type of property, plus judgment and skill. (Original question.)

Question 2. A buyer asks an agent to write a custom clause that cancels the contract if the buyer's business revenue falls. What should the agent do?

• A) Draft the clause in Special Provisions
• B) Recommend that the buyer consult an attorney
• C) Refuse to present the offer
• D) Explain that oral instructions are enough

Answer: B. Drafting language that changes the parties' rights, obligations, or remedies crosses into unauthorized practice of law under Section 537.11. (Original question.)

Question 3. A seller signs one listing but keeps the right to find a buyer personally and avoid the broker's fee. Which listing is described?

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

Answer: B. Exclusive agency appoints one broker but generally preserves the seller's right to sell without broker help and avoid the agreed brokerage fee. (Original question.)

Question 4. An owner-occupied fourplex owner asks an agent to publish "adults only, no children." Which answer is best?

• A) The ad is lawful because the owner lives on the property
• B) The ad is lawful if the agent gives the owner a fair housing notice
• C) The ad is unlawful because discriminatory advertising is not covered by the exemption
• D) The ad is lawful if it appears only online

Answer: C. The owner-occupied exemption does not permit discriminatory advertising. Familial status is federally protected. (Original question.)

Question 5. Two competing brokers agree that neither firm will accept a listing below a 3 percent fee. This is:

• A) lawful because each client may negotiate
• B) price fixing between competitors
• C) an exclusive agency
• D) puffing

Answer: B. The firms coordinated a fee floor instead of setting prices independently. That is horizontal price fixing. (Original question.)

Question 6. A visitor slips on a wet floor in a brokerage lobby and suffers an injury. Which policy is the closer match?

• A) Errors and omissions
• B) General liability
• C) Title insurance
• D) Mortgage insurance

Answer: B. A premises bodily-injury claim is the classic general-liability example. E&O is aimed at professional-service mistakes. Actual coverage always depends on the policy. (Original question.)

How to study this area efficiently

Spend your time in proportion to the outline:

• 30 percent on brokerage agreements: listing types, the 2026 buyer-agreement rule, property management duties, termination, and compensation.
• 30 percent on fair housing: seven federal classes, five prohibited-conduct patterns, exemptions, HUD, and the FHA-versus-ADA distinction.
• 20 percent on broker responsibilities: competence versus legal practice.
• 20 percent on risk management: supervision, privacy and outreach, vicarious liability, antitrust, misrepresentation, E&O, and general liability.

For the last review, carry these seven lines:

1. Real Estate Practice is 10 national scored items, not 16.
2. Competence asks whether the license holder has the skill. UPL asks whether the license holder is doing a lawyer's job.
3. Exclusive right to sell pays despite who finds the buyer. Exclusive agency preserves the seller's self-sale exception.
4. A 2026 residential buyer agreement can be representation or showing-only non-representation.
5. Discriminatory advertising is not saved by the common fair housing exemptions.
6. A firm sets its own fee. Competitors do not coordinate fees or territories.
7. E&O is the professional-error bucket. General liability is the bodily-injury and property-damage bucket.

Frequently Asked Questions

For broader testing and licensing questions, see the Texas real estate exam FAQ.

How many Real Estate Practice questions are on the Texas sales agent exam?

Pearson VUE assigns 10 scored questions to Real Estate Practice on the 80-item national portion. The area-wide mix is five knowledge, three application, and two analysis questions. Five additional national pretest questions are unscored and are not identified.

Is Real Estate Practice the 16-item area?

No. Real Estate Contracts and Agency is the 16-item national area. Real Estate Practice is 10 items. The two areas connect, but Pearson reports them separately.

What topics matter most in Real Estate Practice?

Brokerage agreements and Fair Housing each carry three items. Broker responsibilities and risk management each carry two. The published weights make agreements and fair housing the first study priorities, but no named concept should be skipped.

Does Texas require a buyer agreement before showing a home in 2026?

Yes, when a license holder performs brokerage for a prospective buyer of residential real property. Section 1101.563 requires a written agreement before showing, or before presenting an offer if there is no showing. A qualifying showing-only non-representation agreement may be nonexclusive for no more than 14 days.

May a broker tell a client the firm's commission rate?

Yes. A brokerage may independently set and quote its own fee, and the client may negotiate. The antitrust problem is an agreement among competing firms to set, stabilize, or restrict fees, or falsely presenting a rate as fixed by law or by the industry.

When does the ADA apply instead of the Fair Housing Act?

The Fair Housing Act governs residential housing transactions and rules. ADA Title III applies to public accommodations, including a brokerage or apartment leasing office open to the public. One property can involve both laws in different spaces or activities.

Sources and Methodology

This guide was rechecked on August 12, 2026. The exam name, 10-item weight, four subtopic weights, cognitive mix, and tested concepts come from Pearson VUE's Texas Real Estate Content Outlines, publication #094401, revision 01/2026. That publication keeps the national salesperson outline effective March 1, 2025 and makes the Texas sales agent state-law outline effective January 1, 2026.

Texas points were checked against the current Texas Occupations Code Chapter 1101 and TREC rules, including 22 TAC Sections 531.4, 535.2, 535.16, 535.146, and 537.11. Fair housing points were checked against the federal Fair Housing Act, 42 U.S.C. Sections 3601 through 3619, 42 U.S.C. Section 1982, Texas Property Code Chapter 301, and current HUD material. Antitrust, telemarketing, commercial email, and ADA distinctions were checked against current DOJ, FTC, and ADA.gov guidance. Common-law listing definitions are labeled as exam principles rather than attributed to a Texas statute.

Official Source Links

• Pearson VUE Texas Real Estate Content Outlines, publication #094401
• Texas Occupations Code Chapter 1101
• TREC Rules
• Texas Property Code Chapter 301, Texas Fair Housing Act
• HUD, Fair Housing rights and obligations
• ADA.gov, Title III Technical Assistance Manual
• U.S. Department of Justice, the antitrust laws
• FTC, Complying with the Telemarketing Sales Rule
• FTC, CAN-SPAM compliance guide

This post is educational content for Texas real estate sales agent candidates. It is not legal advice. Verify current law, rules, forms, and exam information before relying on any point in a real transaction.