TREC TREC Ethics and Professional Conduct 2

Question 1

A licensee may share a commission with an unlicensed person:

Accepted Answer

Under no circumstances — only licensed individuals may receive commission

Answer

Texas law prohibits paying commission or compensation to anyone who does not hold an active real estate license, regardless of the circumstances.

Question 2

When must a Texas licensee provide the 'Information About Brokerage Services' (IABS) notice?

Accepted Answer

At the first substantive dialogue about a specific property

Answer

TREC requires licensees to provide the IABS notice at the first substantive communication with a prospective buyer or seller about a specific property.

Question 3

What action should a listing agent take if a buyer's agent submits an offer that includes a material misrepresentation?

Accepted Answer

Refuse to submit the offer and report the issue to the appropriate party

Answer

A licensee must not facilitate a transaction involving a known material misrepresentation and should inform their client and take appropriate action.

Question 4

Under Texas law, a salesperson may receive compensation for real estate services only from:

Accepted Answer

Their sponsoring broker

Answer

A salesperson may only receive compensation through their sponsoring broker — never directly from a client or third party.

Question 5

The concept of 'fiduciary duty' in real estate means a licensee must:

Accepted Answer

Put the client's interests above their own

Answer

Fiduciary duty requires a licensee to act in the client's best interest, placing the client's needs above the licensee's own financial gain.

TREC - Texas Real Estate Commission Practice Test

TREC - Texas Real Estate Commission Practice Test

TREC TREC Ethics and Professional Conduct 2