Before you read
Test yourself first: 5 questions
Question 1 of 5
Which Texas license holder is ultimately responsible for the brokerage's advertising, supervision of sponsored agents, and proper handling of trust funds?
Answer: B. The sponsoring broker is responsible for supervising sponsored agents and for compliance with advertising, trust-account, and recordkeeping requirements within the brokerage.
Question 2 of 5
A licensed attorney in Texas wants to broker real estate transactions for clients for a commission. Which statement is correct?
Answer: B. The attorney exemption applies to acts performed in the course of practicing law. To broker real estate for a commission like any other broker, an attorney must hold a real estate license (though attorneys may qualify for a broker license without the qualifying education requirements).
Question 3 of 5
Which statement best reflects proper handling of multiple clients' trust funds in a single Texas brokerage trust account?
Answer: A. Even when held in one trust account, each client's funds must be separately identified and tracked through accurate records so that no client's money is misused for another.
Question 4 of 5
A Texas broker fails to deposit earnest money into a trust account and instead keeps it in the broker's wallet for several weeks. This conduct most directly violates rules against:
Answer: B. Failing to place client money in a designated trust account and instead keeping it personally constitutes improper handling and commingling of trust funds, a serious TREC violation.
Question 5 of 5
Texas does NOT offer formal license reciprocity with other states. What does this mean for an out-of-state licensee who wants to become licensed in Texas?
Answer: D. Texas has no reciprocity agreements. An out-of-state applicant must apply and meet Texas's qualifications, including passing the Texas portion of the exam; TREC may give credit for qualifying education and may waive the national exam portion in some cases, but Texas-specific requirements still apply.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
To protect consumers harmed by licensee misconduct, Texas maintains a Recovery Trust Account funded through licensing. To renew, a sales agent must complete 18 hours of continuing education each renewal cycle, including the mandatory 4-hour Legal Update courses.
Texas Escrow Fund Handling and License Renewal Requirements: FAQs
Is Texas Escrow Fund Handling and License Renewal Requirements on the real estate exam?
Yes. State License Law is a scored domain on the Texas real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Texas test this differently?
Texas applies its own license law on top of the national portion. This page covers the Texas rules specifically, which is what the state section of your exam tests.
