Texas Real Estate Exam: 10 Must-Know Topics for 2025
The Texas sales agent exam has a 58% first-time pass rate with 125 questions in 2.5 hours and a 70% passing threshold. Texas also requires 180 hours of pre-license education — among the highest in the nation. Here are the 10 topics you must master.
1. TREC License Law & Regulations
The Texas Real Estate Commission (TREC) governs all licensing. Key facts:
- TREC has 9 members (6 industry, 3 public)
- Sales agent license requires 180 hours of education (6 courses × 30 hours)
- Exam fee: $54, license application fee: $205
- Renewal every 2 years with 18 hours of CE (including Legal Update I & II)
- Sales agents must be sponsored by a broker — cannot work independently
Exam Tip: TREC questions are heavily represented. Know the complaint process, disciplinary actions, and canons of professional ethics.
2. SB 1968 — Buyer Representation Agreements (New 2026)
Senate Bill 1968 is the biggest change for 2025-2026 exam takers:
- Takes effect January 1, 2026
- Requires a written buyer representation agreement before substantive property discussions
- Agents can still unlock doors without an agreement, but cannot provide advice or negotiate
- The agreement must specify compensation terms and duration
- Goes beyond NAR settlement requirements with Texas-specific provisions
3. Information About Brokerage Services (IABS)
The IABS is a Texas-specific form that is heavily tested:
- Must be provided at first substantive dialogue about a specific property
- Explains the types of agency representation available
- Does NOT create an agency relationship — it's purely informational
- Required for both buyers and sellers
- Revised in 2025 to reflect SB 1968 changes
4. Texas Homestead Rights
Texas has the strongest homestead protections in the U.S.:
- Urban homestead: up to 10 acres (single person) or 10 acres (family)
- Rural homestead: up to 100 acres (single) or 200 acres (family)
- Protection from forced sale for almost all debts (exceptions: mortgage, property taxes, HOA liens, home equity loans)
- Cannot be waived or abandoned while occupied
- Surviving spouse retains homestead rights
5. Community Property
Texas is a community property state with specific rules:
- Property acquired during marriage is presumed community property
- Separate property: acquired before marriage, gifts, or inheritance
- Both spouses must sign to convey homestead property
- Community property with right of survivorship requires a written agreement
- Divorce partition follows "just and right" division (not necessarily 50/50)
6. Contract Law — Texas Promulgated Forms
TREC promulgates (creates and mandates) most real estate contract forms:
- Agents MUST use TREC-promulgated forms — unauthorized practice of law if they don't
- One to Four Family Residential Contract is the most commonly tested
- Option period: buyer can terminate for any reason during the option period (typically 7-10 days)
- Option money is paid directly to the seller (not held in escrow)
- Earnest money must be deposited within 2 business days of contract execution
7. Property Tax & Ad Valorem Tax
Texas has no state income tax, making property taxes critically important:
- Average effective property tax rate: ~1.8% (among highest nationally)
- Homestead exemption: $100,000 off appraised value for school taxes
- Over-65 or disabled: additional $10,000 exemption + tax ceiling freeze
- Property tax proration at closing uses 365-day method
- Protest process through the county Appraisal Review Board (ARB)
8. Agency Relationships
Texas agency law has unique terminology:
- Intermediary: when a broker represents both buyer and seller (similar to dual agency)
- Broker can appoint associated licensees to each party in intermediary situations
- Subagency has been largely eliminated in Texas practice
- Seller's agent, buyer's agent, or intermediary are the three agency types
- Written consent required for intermediary relationships
9. Deceptive Trade Practices Act (DTPA)
The DTPA provides strong consumer protection in Texas real estate:
- Consumers can sue for unconscionable actions or false/misleading representations
- Treble damages (3x) available for knowing or intentional violations
- Agents can be held personally liable under DTPA
- Defense: written disclosure of known defects before closing
- Seller's Disclosure Notice required for residential properties
10. Environmental & Disclosure Requirements
Texas-specific disclosure topics:
- Seller's Disclosure Notice — required for most residential sales (exemptions: foreclosure, estate)
- Lead-based paint disclosure for pre-1978 properties (federal requirement)
- MUD (Municipal Utility District) disclosure — common in Texas subdivisions
- Flood zone and wildfire risk disclosures (updated 2024)
- Coastal area property: additional disclosures for properties seaward of the Gulf Intracoastal Waterway
Study Strategy
- Master TREC promulgated forms — knowing contract provisions is essential for 15-20 questions
- Memorize homestead rules — Texas homestead protections are unique and heavily tested
- Study SB 1968 thoroughly — new law = guaranteed exam questions
- Practice math calculations — property tax prorations and commission splits are common