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

Is it mandatory for a license holder to use TREC's contract forms?

1. Yes

2. No

3. Only in certain situations

4. Only for residential properties

The correct answer is: Yes

In Texas, it is indeed mandatory for licensed real estate professionals to use the contract forms prescribed by the Texas Real Estate Commission (TREC) for residential transactions. This requirement ensures that the contracts are consistent, comply with state laws, and protect the interests of all parties involved in the transaction. TREC's forms are specifically designed to address the unique aspects of real estate dealings in Texas, including necessary disclosures and legal requirements. While there may be other forms available for different contexts or specific transactions, using TREC's forms for residential real estate transactions helps standardize the process and provides a level of security for both buyers and sellers. This standardization can help minimize misunderstandings and legal disputes arising from conflicting terms or inadequate disclosures. The mandatory usage of these forms does not extend to non-residential transactions or scenarios where custom agreements are permitted, hence making the answer highly applicable in the context of residential real estate deals in Texas.