Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

If the designated broker owns a percentage of the entity, what is the minimum ownership required?

1. 5%

2. 10%

3. 15%

4. 20%

The correct answer is: 10%

The correct answer is based on the regulatory requirements for brokerage entities in Texas, which stipulate the minimum ownership interest a designated broker must hold. According to the Texas Real Estate Commission (TREC) rules, the designated broker must own at least 10% of the business entity to maintain the position and fulfill the responsibilities associated with the brokerage. This requirement is in place to ensure that the broker has a significant stake in the business and is thereby motivated to act in the best interests of both clients and the regulatory framework of real estate transactions. Other percentages do not meet the minimum criteria laid out by TREC, as they either fall below the threshold necessary for effective accountability and control in the brokerage. Hence, 10% is the established minimum that aligns with the principles of responsible brokerage practice within the Texas real estate industry.