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Tennessee Real Estate Broker and Salesperson Examination Content Outline, Cheat Sheet of Business Economics

A comprehensive outline of the content covered in the tennessee real estate broker and salesperson examinations. It includes detailed information on various topics, such as property ownership, land use controls, financing, contracts, agency, property disclosures, property management, transfer of title, practice of real estate, real estate calculations, and state-specific requirements. The outline is organized into national and state portions, covering key areas of real estate knowledge and practice.

Typology: Cheat Sheet

2024/2025

Uploaded on 03/21/2025

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Person(s) accompanying an examination candidate
may not wait in the examination center, inside the
building or on the building's property. This applies to
guests of any nature, including drivers, children,
friends, family, colleagues, or instructors.
Once candidates have been seated and the
examination begins, they may leave the examination
room only to use the restroom, and only after
obtaining permission from the proctor. Candidates
will not receive extra time to complete the
examination.
You may be given a piece of scratch paper and a
pencil. You will return the scratch paper and pencil
during check-out.
Additional protocols for remote online proctored exams,
include but not limited to:
Temporarily moving out of the camera's line of sight.
Candidates are not allowed to have scratch paper.
Adequate lighting for the proctor to see candidate’s
activity.
Internet service must be sufficient to administer the
exam.
Web camera must be placed for ideal viewing by the
proctor.
Candidate may not change computers during the
exam.
Candidate may not change spaces during the exam.
Candidate must follow proctor instructions, which
may include, but are not limited to:
o Keeping hands on the desktop.
o Keeping eyes on the computer screen.
o Not fidgeting during the exam.
o Keeping hands away from face.
Please do your best to avoid covering your mouth for
the whole duration of exam. Be aware that
talking/whispering/mouthing is not allowed during
exam.
Breaks are NOT allowed during remote online
proctored examinations. If you believe you cannot
complete your examination without a break, please
do not register for remote online proctored
examinations.
Also note that under no circumstances are you
allowed to take a screenshot or photo of the exam or
the exam results at any time during or after the
session.
TAKING THE EXAMINATION BY COMPUTER
The examination will be administered via computer. You will
be using a mouse and computer keyboard.
TUTORIAL
Before you start your examination, an introductory tutorial is
provided on the computer screen. The time you spend on this
tutorial, up to 15 minutes, DOES NOT count as part of your
examination time. Sample questions are included following
the tutorial so that you may practice answering questions and
reviewing your answers.
TEST QUESTION SCREEN
One question appears on the screen at a time. During the
examination, minutes remaining will be displayed at the top of
the screen and updated as you record your answers.
IMPORTANT: After you have entered your responses, you will
later be able to return to any question(s) and change your
response, provided the examination time has not run out or
you have ended your examination.
EXAMINATION REVIEW
PSI, in cooperation with TREC, will be consistently evaluating
the examinations being administered to ensure that the
examinations accurately measure competency in the required
knowledge areas. While taking the examination, examinees will
have the opportunity to provide comments on any questions,
by clicking on the comments button. Your comments
regarding the questions and the examinations are welcomed.
These comments will be analyzed by PSI examination
development staff. While PSI does not respond to individuals
regarding these comments, all substantive comments are
reviewed. If a discrepancy is found during the comment
review, PSI and the Commission may re-evaluate candidates’
results and adjust them accordingly. This is the only review
of examination materials available to candidates.
SCORE REPORTING
In order to receive a passing score on each examination, you
must correctly answer the score listed below.
Examination
Portion
# of Items
Minimum Passing
Score (Percent
Correct Required)
Affiliate
Broker
National
80
(80 points)
56 (70%)
State
40
(40 points)
28 (70%)
Broker
National
75
(80 points)
60 (75%)
State
50
(50 points)
38 (75%)
Timeshare
Salesperson
State
35
25 (70%)
Acquisition
Agent
State
35
25 (70%)
Note: National broker exams include questions that are scored up to
two points.
SCORE REPORTING
Your score will be displayed on screen at the end of the
examination and a score report will be emailed to you. If
you fail, the emailed score report will include the
diagnostic report indicating your strengths and weaknesses
by examination type.
You may request a duplicate score report after your
examination by emailing scorereport@psionline.com.
TIPS FOR PREPARING FOR YOUR LICENSE
EXAMINATION
The following suggestions will help you prepare for your
examination.
Planned preparation increases your likelihood of passing.
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Person(s) accompanying an examination candidate may not wait in the examination center, inside the building or on the building's property. This applies to guests of any nature, including drivers, children, friends, family, colleagues, or instructors. Once candidates have been seated and the examination begins, they may leave the examination room only to use the restroom, and only after obtaining permission from the proctor. Candidates will not receive extra time to complete the examination. You may be given a piece of scratch paper and a pencil. You will return the scratch paper and pencil during check-out. Additional protocols for remote online proctored exams, include but not limited to: Temporarily moving out of the camera's line of sight. Candidates are not allowed to have scratch paper. Adequate lighting for the proctor to see candidate’s activity. Internet service must be sufficient to administer the exam. Web camera must be placed for ideal viewing by the proctor. Candidate may not change computers during the exam. Candidate may not change spaces during the exam. Candidate must follow proctor instructions, which may include, but are not limited to: o Keeping hands on the desktop. o Keeping eyes on the computer screen. o Not fidgeting during the exam. o Keeping hands away from face. Please do your best to avoid covering your mouth for the whole duration of exam. Be aware that talking/whispering/mouthing is not allowed during exam. Breaks are NOT allowed during remote online proctored examinations. If you believe you cannot complete your examination without a break, please do not register for remote online proctored examinations. Also note that under no circumstances are you allowed to take a screenshot or photo of the exam or the exam results at any time during or after the session.

TAKING THE EXAMINATION BY COMPUTER

The examination will be administered via computer. You will be using a mouse and computer keyboard. TUTORIAL Before you start your examination, an introductory tutorial is provided on the computer screen. The time you spend on this tutorial, up to 15 minutes, DOES NOT count as part of your examination time. Sample questions are included following the tutorial so that you may practice answering questions and reviewing your answers. TEST QUESTION SCREEN One question appears on the screen at a time. During the examination, minutes remaining will be displayed at the top of the screen and updated as you record your answers. IMPORTANT: After you have entered your responses, you will later be able to return to any question(s) and change your response, provided the examination time has not run out or you have ended your examination. EXAMINATION REVIEW PSI, in cooperation with TREC, will be consistently evaluating the examinations being administered to ensure that the examinations accurately measure competency in the required knowledge areas. While taking the examination, examinees will have the opportunity to provide comments on any questions, by clicking on the comments button. Your comments regarding the questions and the examinations are welcomed. These comments will be analyzed by PSI examination development staff. While PSI does not respond to individuals regarding these comments, all substantive comments are reviewed. If a discrepancy is found during the comment review, PSI and the Commission may re-evaluate candidates’ results and adjust them accordingly. This is the only review of examination materials available to candidates.

SCORE REPORTING

In order to receive a passing score on each examination, you must correctly answer the score listed below.

Examination Portion^

# of Items Minimum Passing Score (Percent Correct Required) Affiliate Broker National (^) (80 points)^80 56 (70%) State (^) (40 points)^40 28 (70%) Broker National (^) (80 points)^75 60 (75%) State (^) (50 points)^50 38 (75%) Timeshare Salesperson State^35 25 (70%) Acquisition Agent State^35 25 (70%) Note: National broker exams include questions that are scored up to two points.

SCORE REPORTING

Your score will be displayed on screen at the end of the examination and a score report will be emailed to you. If you fail, the emailed score report will include the diagnostic report indicating your strengths and weaknesses by examination type. You may request a duplicate score report after your examination by emailing scorereport@psionline.com.

TIPS FOR PREPARING FOR YOUR LICENSE

EXAMINATION

The following suggestions will help you prepare for your examination. ▪ Planned preparation increases your likelihood of passing.

▪ Start with a current copy of this Candidate Information Bulletin and use the examination content outline as the basis of your study. ▪ Read study materials that cover all the topics in the content outline. ▪ Take notes on what you study. Putting information in writing helps you commit it to memory and it is also an excellent business practice. Underline or highlight key ideas that will help with a later review. ▪ Discuss new terms or concepts as frequently as you can with colleagues. This will test your understanding and reinforce ideas. ▪ Your studies will be most effective if you study frequently, for periods of about 45 to 60 minutes. Concentration tends to wander when you study for longer periods of time. Now you can take the practice exam online at National Real Estate Salesperson Practice Examination National Real Estate Broker Practice Exam to prepare for your Tennessee Broker Examinations. Please note that practice exams are intended only to help testing candidates become familiar with the general types of questions that will appear on a licensing examination. They ARE NOT a substitute for proper education and study. Furthermore, scoring well on the practice exam does not guarantee a positive outcome on an actual licensing examination. Note: You may take the practice exams an unlimited number of times. However, you will need to pay each time.

EXAMINATION STUDY MATERIALS

The following is a list of possible study materials for the real estate examinations. The list is given to identify resources and does not constitute an endorsement by PSI or by TREC. Use the latest edition available. NATIONAL PORTION OF THE EXAMINATION ▪ Modern Real Estate Practice, 21st^ Edition, Galaty, Allaway, Kyle, and Williams, Dearborn Real Estate Education, www.dearborn.com, ISBN: 978 - 1 - 0788 - 1887 - 2 ▪ Mastering Real Estate Math, 9th Edition, 2022, Denise Evans www.dearborn.com ISBN: 9781078819008 ▪ The Language of Real Estate, 8th Edition, 2019, Reilly and Spodek, Dearborn Real Estate Education, www.dearborn.com ▪ Property Management, 11th edition, 2016, Kyle, Robert C., Baird, Floyd M. and Kyle, C. Donald, Chicago: Dearborn Real Estate Education www.dearborn.com ▪ Real Estate Law, 11th Edition, 2022, Elliot Klayman, Dearborn Real Estate Education www.dearborn.com ▪ Real Estate Fundamentals, 10th Edition, 2019, Gaddy, Hart, Spodek, Dearborn Real Estate Education,www.dearborn.com ▪ Real Estate Principles, 12th Edition, Charles Jacobus, OnCourse Publishing, N19W24075 Riverwood Drive, Suite 200, Waukesha, WI 53188, 855- 733 - 7239, www.oncoursepublishing.com ISBN 1285420985 ▪ Real Estate Principles, 12th Edition, 2021, Floyd and Allen, Dearborn Real Estate Education,www.dearborn.com ▪ Mastering Real Estate Principles, 8th Edition, 2022, Gerald Cortesi ▪ Real Estate Principles & Practices, 9th Edition, 2014, Arlyne Geschwender, OnCourse Publishing, N19W Riverwood Drive, Suite 200, Waukesha, WI 53188, 855- 733 - 7239, www.oncoursepublishing.com ISBN 0324784554 ▪ Principles of Real Estate Practice, 6th edition, 2019, ettling, Stephen and Cusic, David, Performance Programs Company STATE PORTION OF THE EXAMINATIONTennessee Real Estate Broker's Licensing Act of 1973 , T.C.A. 62- 13 - 312(B)1-21, 1973, Tennessee Legislature, https://www.lawserver.com/law/state/tennessee/tn- code/tennessee_code_title_62_chapter_ TIMESHARE SALESPERSON EXAMINATIONOfficial Manual of the Real Estate Commission, Sections 62 - 13 and 66- 32 ▪ Rules of the Tennessee Real Estate Commission , Section 1260 - 1 ▪ Tennessee Human Rights Act, Section 4- 21 ▪ Modern Real Estate Practice, 18th Edition (pages 173- 187 & 256-257), Galaty, Allaway, and Kyle, Dearborn Real Estate Education, (800) 972 - 2220, www.dearborn.com

DESCRIPTION OF EXAMINATIONS

The affiliate broker and broker examinations are divided into two sections: national and state. Candidates who pass one section but fail the other need retake only the section they failed. The passing score for one section of an examination is valid for two (2) retakes of the failed section or six (6) months, whichever comes first. The timeshare salesperson and acquisition agent exams are one-part. Affiliate broker and broker examinations candidates who fail the first attempt at the examination may retake it as soon as they want (however you cannot schedule until the day after you took the examination). After the second attempt, an examination candidate must wait thirty (30) days between any subsequent failed exams to retake the examination. Note: These retake rules do not apply to the timeshare salesperson and acquisition agent exams. EXAMINATION SUMMARY TABLE Examination Portion # of Items Time Allowed Affiliate Broker National (^) (80 points)^80 160 minutes State 40 (40 points) 80 minutes Broker National (^) (80 points)^75 150 minutes State (^) (50 points)^50 90 minutes Time-share Salesperson State^35 90 minutes

b. VA guaranteed loans c. USDA/Rural Development loan programs

  1. Owner financing (for example, installment or land contract/contract for deed)
  2. Reverse-mortgage loans
  3. Home equity loans and lines of credit
  4. Construction loans
  5. Rehab loans
  6. Bridge loans C. Financing and Lending
  7. Real Estate Settlement Procedures Act (RESPA), including kickbacks
  8. Truth-in-Lending Act (Regulation Z), including advertising
  9. Requirements and time frames of TRID (TILA-RESPA Integrated Disclosures)
  10. Equal Credit Opportunity Act
  11. Lending Process (application through loan closing)
  12. Risky loan features, such as prepayment penalties and balloon payments V. Contracts (Affiliate Broker 19%, Broker 19%) A. General Contract Law
  13. General principles of contract law
  14. Elements necessary for a contract to be valid
  15. Effect of the Statute of Frauds
  16. Offer and a contract
  17. Enforceability of contracts
  18. Void, voidable and unenforceable contracts
  19. Bilateral and unilateral contracts
  20. Nature and use of option agreements
  21. Notice, delivery, acceptance and execution of contracts
  22. Appropriate use, risks, and advantages of electronic signatures and paperless transactions
  23. Rights and obligations of the parties to a contract
  24. Possible remedies for breach or non-performance of contract
  25. Termination, rescission and cancellation of contracts B. Purchase and Lease Contracts
  26. Addenda and amendments to contracts
  27. Purchase agreements
  28. Contract contingencies and methods for satisfying them
  29. Leases and rental agreements
  30. Lease-purchase agreements
  31. Types of leases C. Proper handling of multiple offers and counteroffers VI. Agency (Affiliate Broker 13%, Broker 13%) A. Agency and non-agency relationships
  32. Agency relationships and how they are established
  33. Types of listing contracts
  34. Buyer brokerage/tenant representation contracts
  35. Other brokerage relationships, including transaction brokers and facilitators
  36. Powers of attorney and other assignments of authority
  37. Conditions for termination of agency or brokerage service agreements B. Agent Duties
  38. Fiduciary duties of agents
  39. Agent's duties to customers/non-clients, including honesty and good faith C. Agency Disclosures
  40. Disclosure of agency/representation
  41. Disclosure of possible conflict of interest or self- interest VII. Property Disclosures (Affiliate Broker 7%, Broker 7%) A. Property Condition
  42. Seller's property condition disclosure requirements
  43. Property conditions that may warrant inspections or a survey
  44. Red flags that warrant investigation of public or private land use controls B. Environmental and Government Disclosures
  45. Environmental issues requiring disclosure
  46. Federal, state, or local disclosure requirements regarding the property C. Disclosure of material facts and material defects VIII. Property Management (Affiliate Broker 3%, Broker 5%) A. Duties and Responsibilities
  47. Procurement and qualification of prospective tenants
  48. Fair housing and ADA compliance specific to property management
  49. How to complete a market analysis to identify factors in setting rents or lease rates
  50. Property manager responsibility for maintenance, improvements, reporting and risk management (BROKER ONLY)
  51. Handling landlord and tenant funds; trust accounts, reports and disbursements (BROKER ONLY)
  52. Provisions of property management contracts (BROKER ONLY) B. Landlord and tenant rights and obligations IX. Transfer of Title (Affiliate Broker 6%, Broker 6%) A. Types of deeds B. Title Insurance and Searches
  53. Title insurance policies and title searches
  54. Potential title problems and resolutions
  55. Marketable and insurable title C. Closing Process
  56. When transfer of ownership becomes effective
  57. Process and importance of recordation
  58. Settlement procedures (closing) and parties involved
  59. Home and new construction warranties D. Special Processes
  1. Special issues in transferring foreclosed properties
  2. Special issues in short sale transactions
  3. Special issues in probate transactions X. Practice of Real Estate (Affiliate Broker 12%, Broker 12%) A. Antidiscrimination
  4. Federal Fair Housing Act general principles and exemptions
  5. Protected classes under Federal Fair Housing Act
  6. Protections against discrimination based on gender identity and sexual orientation
  7. Prohibited conduct under Federal Fair Housing Act (Redlining, Blockbusting, Steering, Disparate Treatment)
  8. Fair housing advertising rules
  9. Americans with Disabilities Act (ADA) obligations pertaining to accessibility and reasonable accommodations B. Legislation and Regulations
  10. Licensees’ status as employees or independent contractors
  11. Antitrust laws and types of violations, fines and penalties
  12. Do-Not-Call List rule compliance
  13. Proper use of Social Media and Internet communication and advertising C. Duties and Responsibilities
  14. Protection of confidential personal information (written, verbal or electronic)
  15. Duties when handling funds of others in transactions
  16. Licensee responsibility for due diligence in real estate transactions D. Supervisory Responsibilities (BROKER ONLY)
  17. Broker's supervisory responsibilities (licensees, teams and unlicensed assistants and employees) (BROKER ONLY)
  18. Broker relationship with licensees (employees or independent contractors and governing rules) (BROKER ONLY) XI. Real Estate Calculations (Affiliate Broker 7%, Broker 6%) A. Calculations for Transactions
  19. Seller’s net proceeds
  20. Buyer funds needed at closing
  21. Real property tax and other prorations
  22. Real property transfer fees
  23. PITI (Principal, Interest, Taxes and Insurance) payments estimate given loan rate and term B. General Concepts
  24. Equity
  25. Rate of return/Capitalization rate
  26. Loan-to-Value ratio
  27. Discount points and loan origination fees

VI. Truth-in-Lending (1 Item) A. Definitions & General Information

SAMPLE QUESTIONS

The following questions are offered as examples of the types of questions you will be asked during the course of the National Real Estate Broker and Salesperson examinations. They are intended primarily to familiarize you with the style and format of questions you can expect to find in the examinations. The examples do NOT represent the full range of content or difficulty levels found in the actual examinations. SAMPLE QUESTIONS A. Which of the following interests in property is held by a person who is granted a lifetime use of a property that will be transferred to a third party upon the death of the lifetime user?

  1. A life estate.
  2. A remainder estate.
  3. An estate for years.
  4. A reversionary estate. B. Which of the following statements BEST identifies the meaning of the term, “rescission of a contract”?
  5. A ratification of a contract by all parties.
  6. A return of all parties to their condition before the contract was executed.
  7. A transfer or assignment of a particular responsibility from one of the parties to another.
  8. A review of the contract by the legal counsel of either party that may result in a cancellation without penalty or further obligation. C. Which of the following clauses in a mortgage allows the lender to demand loan repayment if a borrower sells the property?
  9. Defeasance
  10. Prepayment
  11. Acceleration
  12. Alienation D. How much cash MUST a buyer furnish in addition to a $2,500 deposit if the lending institution grants a 90% loan on an $80,000 property?
  13. $5,500.
  14. $6,975.
  15. $7,450.
  16. None of the above. E. Which of the following single-family residences would get the MOST accurate appraisal by applying the reproduction cost approach to value?
  17. A rental property.
  18. A vacant property.
  19. A new property.
  20. An historic property. Answers to Sample Broker Questions: A: 1; B: 2; C: 4; D: 1; E: 4

SAMPLE BROKER QUESTIONS (SCENARIO-BASED)

PSI National Real Estate Broker Examination Instruction IMPORTANT Test questions appear on the screen ONE AT A TIME. A question may have an associated graphic displayed on the screen, or it may direct the candidate to reference material, such as a chart or diagram. Each question may contain up to EIGHT options and ONLY ONE BEST option shall be selected to answer the question. Some options are appropriate but NOT the BEST ANSWER. Please select the option that best answers the question in the exam. A BEST ANSWER reflects the optimal solution or most complete resolution to the scenario presented in the question. Scenario: You are hosting an open house. Mr. and Mrs. Charles Martin come into the house. You greet them and show them the house. The Martins tell you the house is exactly what they are looking for and they are very interested in purchasing it. You then give them information showing the various types of financing available with down payment options and projected payments. Mr. Martin tells you they have been working with Mary Hempstead of XX Realty, a competing real estate company. Before leaving, you thank them for coming and give them your business card. A. The first thing on Monday morning, Mrs. Martin calls and indicates they have tried to reach Mary and cannot. They indicate they have a written buyer’s agent agreement with Mary’s broker. They are afraid someone else is going to buy the house. Which of the following should you do? Select the best answer.

  1. Seek advice from your supervising broker.
  2. Tell them to come to your office.
  3. Ask them to bring the buyer’s agency agreement to you for your interpretation.
  4. Tell them to be patient and continue trying to reach Mary.
  5. Tell them to call Mary’s supervising broker or branch manager.
  6. Tell them you are really sorry, but there is nothing you can do. B. The Martins come to your office and explain that neither Mary nor her supervising broker are available. They insist you immediately write an offer for the house. How should you proceed? Select the best answer.
  7. Write the offer after entering into a buyer’s broker agreement with them.
  8. Write the offer after explaining they may owe Mary’s broker a commission.
  9. Write the offer after trying to contact Mary’s broker yourself.
  10. Refuse to write an offer and explain that doing so would be unethical.
  11. Refuse to write and offer since it would be illegal.
  12. Refuse to write the offer and tell the Martins to contact another Broker in Mary’s office.