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

What must a business entity do to qualify as a broker in Texas?

1. Designate a corporate attorney

2. Establish a physical office

3. Have a managing officer and be in good standing

4. Obtain a federal business license

The correct answer is: Have a managing officer and be in good standing

To qualify as a broker in Texas, a business entity must have a managing officer and be in good standing. This requirement ensures that there is a qualified individual overseeing the brokerage activities, which is essential for compliance with Texas real estate laws and regulations. The managing officer must possess the necessary broker's license and is responsible for the operations of the business entity. Being in good standing is also crucial, as it indicates that the entity is compliant with state regulations, has met any required fees, and is not facing any legal issues that could prevent it from operating as a licensed broker. This structure promotes accountability and integrity within the real estate market in Texas. While establishing a physical office may be a practical aspect of running a brokerage, it is not a formal requirement for qualifying as a broker. Similarly, designating a corporate attorney or obtaining a federal business license are not necessary criteria for broker qualification in Texas. The focus is placed on having a qualified managing officer and the entity’s compliance with state regulations.