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

What is one major focus of RESPA beyond consumer education?

1. Increasing transaction costs

2. Eliminating conflicts of interest

3. Standardizing loan products

4. Preventing false advertising

The correct answer is: Eliminating conflicts of interest

One major focus of the Real Estate Settlement Procedures Act (RESPA) beyond consumer education is to eliminate conflicts of interest in real estate transactions. RESPA was established to ensure that consumers receive information about the costs of their real estate transactions and to promote transparency in the industry. By addressing and eliminating conflicts of interest, RESPA aims to ensure that all parties involved in the transaction act in the best interest of the consumer. This is particularly important because conflicts of interest can lead to unfair practices, where a party may prioritize their financial gain over the well-being of the consumer. For example, if a real estate agent receives a kickback from a title company for steering clients their way, this can compromise the integrity of the transaction and lead to higher costs for consumers. In contrast, the other options do not accurately reflect RESPA's primary focus. Increasing transaction costs does not align with RESPA's goals, as the act is designed to lower costs and enhance consumer protection. Standardizing loan products is not a specific aim of RESPA; rather, it addresses the processes and disclosures related to real estate settlements. Preventing false advertising, while important, is less central to RESPA's mission compared to addressing conflicts of interest and enhancing transparency in real estate transactions