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TENNESSEE REAL ESTATE LICENSING & AGENCY
REGULATIONS FINAL EXAM QUESTIONS & DETAILED
ANSWERS ALREADY GRADED A+ NEW VERSION
Initial disclosure of agency - CORRECT ANSWER >>> Must be made to an unrepresented
buyer or seller no later than closing of the transaction, prior to providing any real estate services, prior to showing any properties to a buyer or presenting an offer to the seller, before writing an offer.
Limited agent - CORRECT ANSWER >>> A client relationship between listing licensee and
other licensees who work with the other party to a transaction.
Subagent - CORRECT ANSWER >>> A client relationship where a licensee represents another
party in a transaction.
Dual agent - CORRECT ANSWER >>> A situation in which a licensee has agreement to
represent and provide services as the agent of more than one party in a specific transaction.
Facilitator - CORRECT ANSWER >>> A licensee who assists in a transaction without
representing either party.
Broker license residency requirement - CORRECT ANSWER >>> Brandon must have resided
in Tennessee for 60 days to be eligible.
Website information requirement - CORRECT ANSWER >>> Firm name and address, firm
name and telephone number, firm name and firm license number, firm name and state of licensure must be included conspicuously on each page of the company website.
Affiliate brokers continuing education - CORRECT ANSWER >>> Must complete 16 hours of
continuing education, including a 6 hour core course, upon renewing for the first time.
Conveyance of real estate - CORRECT ANSWER >>> The forms of conveyance in
Tennessee include general warranty deed, quitclaim deed, deed in lieu of foreclosure, and deed of trust.
Agent duties to client - CORRECT ANSWER >>> An agent does not owe the duty of disclosing
confidential information obtained from the other party prior to the agent disclosing his or her agency status unless waived.
Retired status of affiliate broker - CORRECT ANSWER >>> An affiliate broker in retired status
may continue to market properties listed by the licensee that were active at the time the license was placed on retired status.
Mechanic's lien in Tennessee - CORRECT ANSWER >>> It must be filed within one year from
when the work was commenced.
Prime contractor's lien - CORRECT ANSWER >>> A prime contractor's lien continues for two
years after completion of improvement.
Affiliate broker sign requirement - CORRECT ANSWER >>> The broker's name must be
included on the sign along with the affiliate broker's name and phone number.
Impact fees disclosure - CORRECT ANSWER >>> Any impact fees must be disclosed by a
seller.
Single-family residence disclosure - CORRECT ANSWER >>> If a single-family residence on
the property has been moved from its existing foundation, it must be disclosed.
Co-owner transfer disclosure - CORRECT ANSWER >>> Transfers from one co-owner to
another current co-owner require the Residential Property Condition Disclosure.
Any deaths or suicides that occurred on the property - CORRECT ANSWER >>> Adverse
material facts regarding the property
The Uniform Administrative Procedures Act - CORRECT ANSWER >>> Contains the Rules that
promulgate the license act, governs procedures regarding hearings and judicial review of contested cases, assures due process, and requires that licensees are provided any violation charge in writing.
The Tennessee Real Estate Commission - CORRECT ANSWER >>> Is authorized to conduct
hearings, resolve commission disputes between brokers, promulgate rules, and approve applications for licensure.
A licensee who violates the license act or the Rules - CORRECT ANSWER >>> Is guilty of a
Class E felony and is subject to license suspension, revocation, or a fine by the Commission. A party to a transaction with whom the broker has entered into a specific written agency
agreement - CORRECT ANSWER >>> Is called a client.
Typically, E&O insurance covers - CORRECT ANSWER >>> Errors or negligence in preparing
contracts or performing other real estate services.
Which of the following statements is FALSE regarding duties owed to clients? - CORRECT
ANSWER >>> Some duties may be waived.
Which of the following does NOT have to be disclosed by a licensee? -^ CORRECT ANSWER
>>> Referral fees paid to another licensee for providing real estate services.
Which of the following statements is TRUE regarding termination of tenancy? - CORRECT
ANSWER >>> The landlord or tenant may terminate a month-to-month tenancy by giving at
least 30 days written notice prior to the termination date.
Shirley was licensed 4 years ago and is needing to take her continued education. - CORRECT
ANSWER >>> She must complete 30 hours to satisfy this requirement.
Which of the following statements is FALSE regarding adverse possession in Tennessee? -
CORRECT ANSWER >>> The use must continue for 20 years without color of title.
If a broker does not handle money belonging to others - CORRECT ANSWER >>> The broker
may request a waiver to avoid maintaining an escrow account.
Nathan is an agent with Countywide Realty. - CORRECT ANSWER >>> He should reply, 'If
radon is a concern to you then by all means have a radon test performed during your inspection period.'
Trust accounts requirements - CORRECT ANSWER >>> All brokers must maintain escrow
account records for a minimum of five years.
Designated agent exam requirement - CORRECT ANSWER >>> Dana must take the same
exam as a time-share salesperson.
Minimum passing score for affiliate broker license - CORRECT ANSWER >>> Kathy needs to
receive 70% for national and 75% for state.
Commission sharing - CORRECT ANSWER >>> A broker may share commission with a broker
in Georgia who provides a referral.
Real estate office changes notification - CORRECT ANSWER >>> Within ten days of location
change, all licensees registered at that office are required to notify the Commission in writing of their new business address and pay a fee.
Commission notification for principal broker resignation - CORRECT ANSWER >>> The
Commission must be notified within ten days of the resignation of the principal broker.
Escrow account requirement upon office location change - CORRECT ANSWER >>> When
transferring office location, the broker must immediately open a new escrow account in an institution in the vicinity of the office.
Misrepresentation consequences in disclosures -^ CORRECT ANSWER^ >>> Misrepresentation
cannot result in court action for actual damages.
Limited warranty in disclosures - CORRECT ANSWER >>> The Residential Property Condition
Disclosure form is a limited warranty.
Owner's requirement when selling 'as-is' - CORRECT ANSWER >>> When selling 'as-is', the
owner is not required to provide the buyer with any documentation.
Trust account for affiliate broker - CORRECT ANSWER >>> An affiliate broker may, with the
approval of her broker, have a trust account for client funds.
Escrow account for earnest money - CORRECT ANSWER >>> The broker must have one
escrow account for earnest money, security deposits, and other funds belonging to others.
Broker's obligation upon offer acceptance - CORRECT ANSWER >>> A broker must deposit
earnest money promptly after offer acceptance or according to buyer's instructions in the offer.
False statement about Tennessee Real Estate Commission - CORRECT ANSWER >>> Three
members are appointed from each of the three grand divisions.
Broker's payment to a secretary - CORRECT ANSWER >>> A broker may share commission
with a secretary at a local school for providing information on families moving to the area.
Real estate taxes in Tennessee - CORRECT ANSWER >>> assessed at 10%, 20%, 25%, or 30%
of market value.
Right of a landlord - CORRECT ANSWER >>> Retaining a tenant's security deposit for
nonpayment of rent.
Agency contract - CORRECT ANSWER >>> A written contract that provides authority for a
real estate licensee to act as another party's exclusive agent.
Affiliate broker license requirements - CORRECT ANSWER >>> An applicant must be at least
18 years of age.
Completion of licensing exam - CORRECT ANSWER >>> Must pass the licensing exam within
four months prior to license application.
Residency requirement for license - CORRECT ANSWER >>> Must be a resident of Tennessee
for at least three months.
Pre-license course requirement - CORRECT ANSWER >>> Complete a 75-hour pre-license
course.
Permitted act by a licensee - CORRECT ANSWER >>> (Definition not provided in the notes).
Utility services suspension by landlord - CORRECT ANSWER >>> Suspending a tenant's utility
services when suing for possession.
Depositing tenant's security deposit - CORRECT ANSWER >>> Depositing tenant's security
deposit into the landlord's personal account.
Eviction notice requirement - CORRECT ANSWER >>> Evict the tenant with one rent period's
notice.
Broker's office presence - CORRECT ANSWER >>> The broker must spend at least two hours
per day in the office.
Licensee transfer documentation - CORRECT ANSWER >>> The terminating licensee must
submit a TREC Form 1 to the Commission within 10 days.
Transfer of listings - CORRECT ANSWER >>> The terminating licensee may take to the new
brokerage only listings obtained by the licensee while associated with the broker.
Duties owed only to clients - CORRECT ANSWER >>> Obedience of all lawful instructions and
loyalty of the interests of the client.
Duty owed to all parties in a transaction - CORRECT ANSWER >>> Disclosure of adverse facts.
Passing score for time-share salesperson state exam - CORRECT ANSWER >>> 70%.
Facilitator's role in transactions - CORRECT ANSWER >>> A facilitator is a non-agent.
E&O insurance requirements - CORRECT ANSWER >>> A policy is available through the
Commission.
commingling - CORRECT ANSWER >>> Maintaining funds belonging to others in the same
bank account that contains a licensee's personal or business funds.
licensee activities after termination - CORRECT ANSWER >>> A licensee whose affiliation
with a firm is terminated may not conduct any real estate activities until the licensee applies for and receives a new license.
timeshare salesperson license requirements - CORRECT ANSWER >>> An applicant must take
a 30-hour prelicense course to qualify for a timeshare salesperson license.
broker application submission - CORRECT ANSWER >>> A broker or affiliate broker submits
their application for licensure within 6 months after taking the exam.
mortgage transfer taxes calculation - CORRECT ANSWER >>> Barry owes $457.70 in
mortgage transfer taxes at closing, calculated as $500,000 x 80% = $400,000 - $2,000 = $398,000 ÷ 100 = $3,980 x .115.
title to secured property in Tennessee - CORRECT ANSWER >>> The lender holds title to
secured property.
false statements for timeshare salesperson license - CORRECT ANSWER >>> Applicants must
have passed the license exam three months preceding the date of application.
affiliate broker bonus acceptance - CORRECT ANSWER >>> An affiliate broker may accept a
bonus from a seller when obtaining written permission from both the buyer and seller.
Real Estate Education and Recovery Account - CORRECT ANSWER >>> An aggrieved party
may collect up to $15,000 from the Real Estate Education and Recovery Account.
deed recording requirements in Tennessee - CORRECT ANSWER >>> The intangible recording
tax must be paid before a deed may be recorded.
interest-bearing escrow accounts - CORRECT ANSWER >>> Interest-bearing escrow accounts
are neither required nor prohibited by law.
limited agency - CORRECT ANSWER >>> The client's liability for the actions of the agent is
limited to the actions initiated by instructions of the client or of which the client had knowledge.
licensee activities for a customer - CORRECT ANSWER >>> Writing an offer as directed by the
customer may be performed by a licensee for a customer.
Agency relationship disclosure at open house - CORRECT ANSWER >>> When must
Barbara disclose her agency relationship with the agent of the open house? Before preparing an offer, If the clients are interested in the house, Initial contact, Within 24 hours.
Elective shares - CORRECT ANSWER >>> Elective shares means a surviving spouse can
contest the will if it does not leave a certain percentage of the estate to the spouse.
Broker's license revocation - CORRECT ANSWER >>> A broker's license may be revoked or
suspended if the broker does not maintain transaction and escrow records for a minimum of three years.
Handling of multiple offers - CORRECT ANSWER >>> What is TRUE regarding the handling of
multiple offers? The licensee's best option is to inform the offeree of available options and let the offeree decide how to proceed.
Escheat - CORRECT ANSWER >>> Escheat means a person dies without a will and no heirs.
Mortgage transfer tax - CORRECT ANSWER >>> What is the amount of the mortgage transfer
tax on a loan of $245,000? $279.45, $281.75, $290.50, $265.00.
Tennessee real estate office requirements - CORRECT ANSWER >>> Every Tennessee real
estate office is required to maintain transaction records for at least five years.
Affiliate broker - CORRECT ANSWER >>> Which of the following statements is FALSE
regarding an affiliate broker? An affiliate broker is a licensee in the process of obtaining a broker license.
