Texas Real Estate Agency & Intermediary Practice Questions (Free + Explained)

TL;DR

What Does the Texas Real Estate Agency Section Test?

Based on the current Pearson VUE Texas Real Estate Candidate Handbook and exam content outline, Agency and Intermediary content appears primarily on the state portion of the Texas real estate licensing exam. The state outline explicitly lists Agency & Brokerage as a standalone category — candidates who fail often benefit from our retake guide which covers this section in depth — and Texas agency law is uniquely structured compared to most other states, which is why this section trips up candidates who have studied generic national content. Our complete study guide explains how to prioritize Texas-specific content in your preparation.

Texas does not recognize traditional dual agency. Instead, when a broker represents both parties in the same transaction, Texas law requires the broker to act as an intermediary — a distinct legal arrangement governed by TRELA and TREC rules — both covered in our laws and compliance practice questions. Understanding the difference between standard agency relationships and Texas intermediary brokerage is essential for passing the state portion — along with mastering TREC contract forms, the other major Texas-specific content area.

What Topics Are Tested?

• Types of agency relationships — seller's agent (listing agent), buyer's agent, and subagency. In a standard agency relationship, the agent owes fiduciary duties exclusively to their principal. Know who the principal is in each relationship and what duties are owed.
• Fiduciary duties — the six fiduciary duties owed by an agent to their principal: loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care and diligence (OLDCAR is a common memory device). These duties define the standard of conduct for all agency relationships.
• Texas intermediary brokerage — when a single broker represents both buyer and seller in the same transaction, Texas law requires the broker to act as an intermediary rather than as a dual agent. The intermediary must obtain written consent from both parties, may not disclose confidential information from either party to the other, must remain neutral, and must treat both parties fairly and honestly.
• Intermediary with appointed associates — when acting as intermediary, a broker may appoint one licensed associate to work with the seller and another to work with the buyer. Appointed associates may continue to provide advice and opinions to their respective clients — something the broker acting alone as intermediary may not do, as the broker must remain neutral.
• Written disclosure requirements — Texas requires specific written disclosures at the first substantive contact with a prospective buyer or seller. The Information About Brokerage Services (IABS) notice must be provided. Failure to provide timely written disclosure is a TREC violation.
• Termination of agency — agency relationships can be terminated by completion of the transaction, expiration of the listing agreement, mutual agreement, death or incapacity of either party, or destruction of the property. Unilateral termination by the principal may still expose them to liability for the broker's commission — commission rules are covered in our real estate math practice questions.
• Subagency and vicarious liability — a broker who authorizes a subagent to act on their behalf may be vicariously liable for the subagent's actions. Subagency may appear in national-style questions but is not common in Texas practice. Understand the concept and the vicarious liability principle it carries.

What Are the Common Exam Traps in This Section?

• Texas does not recognize traditional dual agency — this is the most important distinction for the state exam. In states that permit dual agency, the agent represents both parties simultaneously. Texas instead requires intermediary status with specific written consent and disclosure obligations. When a question describes a broker representing both parties without intermediary disclosure, that describes a prohibited arrangement.
• Intermediary vs intermediary with appointed associates — these are two different arrangements. As a plain intermediary, the broker handles both parties directly but may not provide advice or opinions that favor one party over the other — the broker must remain neutral and provide only factual information. With appointed associates, the broker appoints separate licensees to each party, who may then advise their respective clients. The distinction is commonly tested.
• IABS timing — the Information About Brokerage Services notice must be provided at first substantive contact, not at the time of contract signing. Many candidates miss questions about when disclosure is required.
• Fiduciary duties run to the principal only — an agent owes fiduciary duties to their client (principal), not to the other party in the transaction. However, all license holders owe honesty and disclosure of material facts to all parties — this is a statutory duty, not a fiduciary one.
• Confidentiality survives the transaction — the duty of confidentiality continues after the agency relationship ends. An agent cannot disclose a former client's confidential information even after the transaction closes.
• Listing agreements formally establish agency — A listing agreement creates the agency relationship between the broker and the seller. The listing agent is the seller's agent by default. A buyer's agent is created when a buyer signs a buyer representation agreement.

How Ardelia Structures These Practice Questions

Ardelia's question bank contains 300+ Agency & Intermediary practice questions covering all topics above. Each question includes:

• A full explanation of why the correct answer is right
• Why each wrong answer is wrong — with particular attention to the Texas intermediary rules that differ from national standards
• The specific TRELA provision, TREC rule, or agency principle being tested
• Scenario-based questions that mirror the format used on the actual exam — "Which of the following best describes the broker's role when..."

The adaptive engine tracks your accuracy on intermediary questions separately from general agency questions. If you are strong on fiduciary duties but weak on intermediary appointment rules, your sessions will automatically route more intermediary scenarios until your accuracy improves.

Frequently Asked Questions

Does Texas allow dual agency?

No. Texas does not recognize traditional dual agency. When a single broker represents both the buyer and seller in the same transaction, Texas law requires the broker to act as an intermediary instead. This requires written consent from both parties and imposes specific restrictions — the broker may not disclose either party's confidential information to the other and must treat both parties fairly. This is one of the most tested distinctions on the Texas state exam.

What is the difference between an intermediary and an intermediary with appointed associates?

As a plain intermediary, the broker handles both parties directly but may not provide advice or opinions that favor one party over the other — the broker must remain neutral and provide only factual information. When the broker appoints separate licensed associates to work with each party, those appointed associates may advise and advocate for their respective clients. The appointment of associates restores the advisory relationship for each party while keeping the broker neutral.

When must the IABS notice be provided?

The Information About Brokerage Services (IABS) notice must be provided at or before the first substantive dialogue with a prospective buyer or seller — not at the time of signing a contract or listing agreement. TREC defines substantive dialogue as a discussion about specific real estate needs, wants, or concerns — not casual or purely informational conversation. Providing it late is a TREC rule violation.

What are the six fiduciary duties owed by an agent to their principal?

The six fiduciary duties are loyalty, obedience, disclosure, confidentiality, accounting, and reasonable care and diligence. A common memory device is OLDCAR (Obedience, Loyalty, Disclosure, Confidentiality, Accounting, Reasonable care). These duties are owed exclusively to the agent's principal — not to the other party in the transaction, though all license holders owe honesty and disclosure of material facts to all parties by statute.

Source: Pearson VUE Texas Real Estate Salesperson Candidate Handbook · Texas Real Estate Commission (trec.texas.gov)