Сделай эти утверждения вопросами.They live near my school.
здесь только одно утверждение. Где другие?
Do they live near school? Who live near school? Where do they live?
Во втором вопросе глагол должен иметь окончание s.
Do they live near my school? Do they live near my school or near my house? Who lives near my school? Where do they live?