Tennessee Real Estate Affiliate Broker Exam — All Questions

A Tennessee affiliate broker takes an earnest money check from a buyer. What must he do with it?

• a.Pay it over to his principal broker immediately on receipt✓
• b.Deposit it in his own trust account within three banking days
• c.Hold it until the seller accepts or rejects the written offer
• d.Mail it to the closing attorney named in the sales contract

An affiliated broker must pay over to his principal broker all trust money immediately upon receipt; it is the principal broker who maintains the separate escrow or trustee account and who stays responsible for the funds. An affiliate broker does not hold a trust account of his own. Cite: Tenn. Comp. R. & Regs. 1260-02-.09(2)-(4).

How do the Tennessee rules define commingling?

• a.Holding earnest money in an interest-bearing escrow trust account
• b.Depositing two different buyers' deposits into one account
• c.Paying a firm operating expense out of the escrow account
• d.Keeping others' funds in an account holding the licensee's own✓

The rule defines commingling as a licensee maintaining funds belonging to others in the same bank account that contains his or her personal or business funds, and separately declares commingling of funds within firm accounts expressly prohibited. Holding several clients' deposits together in the firm escrow account is not commingling. Cite: Tenn. Comp. R. & Regs. 1260-02-.09(1)(a), (13).

May a Tennessee principal broker place trust money in an interest-bearing escrow account?

• a.No, because the Commission's rules require a non-interest account
• b.Yes, with disclosure to the payor and a written interest agreement✓
• c.Yes, and the broker may keep the interest as a service charge
• d.Only if the interest is remitted to the Commission each year

Interest-bearing escrow or trustee accounts are neither required nor prohibited. If one is used, the licensee must disclose at contract execution that the deposit will be placed in such an account, execute a written agreement with the payor on how interest is disposed of, and keep a precise accounting of interest earned per deposit; the licensee does not own that interest. Cite: Tenn. Comp. R. & Regs. 1260-02-.09(14).

A Tennessee seller offers to let the agent keep everything above a stated price. What do the rules say?

• a.No broker or affiliate broker may accept a net price listing✓
• b.It is permitted if the seller signs a written acknowledgment
• c.It is permitted only on commercial and vacant land listings
• d.It is permitted if the firm's principal broker approves it

The rule flatly bars a broker or affiliate broker from accepting or entering a listing based on a net price, meaning a price that excludes the customary commission and the expenses associated with the sale. No disclosure or broker approval cures it. Cite: Tenn. Comp. R. & Regs. 1260-02-.07.

How long must a Tennessee licensee keep promptly tendering written offers on a listed property?

• a.Until the seller accepts one of the offers presented to him
• b.Until the listing agreement expires or is cancelled by either
• c.Until a contract on the property is signed by all the parties✓
• d.Until the seller instructs the licensee in writing to stop

The rule requires every written offer to purchase or sell to be tendered promptly until a contract is signed by all parties, so offers keep coming even after the seller has accepted one but before full execution. If an offer is rejected, the licensee must ask the seller to note the rejection and return the offer. Cite: Tenn. Comp. R. & Regs. 1260-02-.08.

A Tennessee team advertises under its team name. What do the advertising rules require of the firm name?

• a.It may be left off if the team is registered with the firm
• b.It must appear in letters at least half the size of the team's name
• c.It must appear somewhere on the reverse side of the sign
• d.It must appear in letters the same size or larger than the team's✓

All advertising is under the direct supervision of the principal broker and must list the firm name and firm telephone number on file with the Commission, with the firm name in letters the same size or larger than the name of a licensee or of any team or group. Advertising only a franchise name without the firm name is treated as misleading. Cite: Tenn. Comp. R. & Regs. 1260-02-.12(3)(b), (3)(f).

Where must the firm name and firm telephone number appear in a Tennessee licensee's social media advertising?

• a.On the viewable page itself, in every individual post made
• b.No more than one click away from the viewable page✓
• c.In the profile biography and in every single photo caption
• d.Anywhere on the platform, as long as the firm has consented

For social media the rule relaxes the website standard: the firm name and firm telephone number on file with the Commission must be no more than one click away from the viewable page. On a firm website itself they must appear conspicuously on every page. Cite: Tenn. Comp. R. & Regs. 1260-02-.12(5)(a), (6)(b).

What must a Tennessee licensee have before posting a sign advertising a property for sale?

• a.Written authorization from the owner or the owner's agent✓
• b.A sign permit issued by the local zoning or codes authority
• c.An MLS listing number already issued for that same property
• d.Verbal permission from the property's current occupant

No licensee may post a sign advertising property for sale, purchase, exchange, rent or lease without written authorization from the owner of the advertised property or the owner's agent. A separate provision bars advertising another licensee's listing without the listing agent's or listing broker's written authorization. Cite: Tenn. Comp. R. & Regs. 1260-02-.12(3)(d)-(e).

May a Tennessee licensee advertise a cash rebate to attract buyers?

• a.Yes, if the rebate is shown on the closing disclosure form
• b.Yes, if the firm's principal broker approves it beforehand
• c.No, cash-based incentives in a transaction are prohibited✓
• d.No, unless the rebate stays under five hundred dollars

A licensee may not give or pay cash rebates, cash gifts, gift cards, cash prizes or any similar cash-based incentive in a real estate transaction, with two narrow exceptions: a gift card at an open house held for other licensees, and a gift card as a closing gift. A closing-gift card may not be used in advertising to induce business. Cite: Tenn. Comp. R. & Regs. 1260-02-.33(2).

Who may pay a Tennessee licensee who holds out as part of a team within a firm?

• a.The team leader, out of the team's own operating account
• b.Any cooperating broker involved in the team's transactions
• c.The team's registered entity, if it holds a firm license
• d.The principal broker of the firm, and no one else at all✓

Licensees holding themselves out as a team, group or similar entity within a firm may not receive compensation from anyone other than their principal broker for acts covered by the license law. The same rule bars a separate physical location for the team and bars the team from naming its own designated agents. Cite: Tenn. Comp. R. & Regs. 1260-02-.41(2), (1), (5).

A Tennessee licensee prepares an offer to buy a house served by a septic system. What does the Commission's rule require in the offer?

• a.A contingency letting the buyer void the offer if it fails
• b.Notice that a septic inspection letter is available for a fee✓
• c.A copy of the county health department's permit for the tank
• d.A statement that the seller warrants the system is working

The rule requires the licensee preparing an offer to buy to provide in the offer, and make the buyer aware, that a septic system inspection letter is available for a fee through the Tennessee Department of Environment and Conservation, Division of Ground Water Protection. It is a notice requirement, not a warranty or a contingency. Cite: Tenn. Comp. R. & Regs. 1260-02-.37.

How much real estate education must a Tennessee affiliate broker applicant finish before sitting for the licensing examination?

• a.Sixty hours in real estate principles or fundamentals✓
• b.Ninety hours in real estate principles or fundamentals
• c.Thirty hours in real estate principles or fundamentals
• d.Forty-five hours in real estate principles or fundamentals

The Commission requires sixty hours of real estate education in principles or fundamentals before the examination. The thirty-hour Course for New Affiliates is a separate requirement that comes afterward, so the ninety-hour figure is the two courses combined rather than the pre-examination requirement. Cite: Tennessee Real Estate Commission, Affiliate Broker Licensure requirements, tn.gov/commerce/regboards/trec; T.C.A. 62-13-303.

What is the thirty-hour Course for New Affiliates in Tennessee?

• a.The broker upgrade course covering office and brokerage management
• b.The continuing education a licensee takes each renewal period
• c.A course an affiliate broker must finish before licensure✓
• d.An optional course that shortens the sixty-hour principles course

Affiliate brokers licensed after December 31, 2004 must have completed the thirty-hour Course for New Affiliates before the license is issued, and a certificate or letter of completion is filed with the application. It is distinct from continuing education and from the broker's Office and Brokerage Management course. Cite: Tennessee Real Estate Commission, Affiliate Broker Licensure requirements, tn.gov/commerce/regboards/trec.

What classroom education must a Tennessee broker candidate present with the broker application?

• a.Sixty hours, of which thirty must be office and brokerage management
• b.One hundred twenty hours, thirty in Office or Broker Management✓
• c.Ninety hours, sixteen of them Office or Broker Management
• d.Two hundred forty hours, of which sixty must be brokerage management

A Tennessee broker candidate must complete one hundred twenty classroom hours of approved real estate education, thirty of which must be an Office or Broker Management course taken at a Commission-approved school. Cite: Tennessee Real Estate Commission, Broker Licensure requirements, tn.gov/commerce/regboards/trec.

How long must someone licensed as a Tennessee affiliate broker today hold that license before qualifying for a broker license?

• a.Twelve months of active licensure in this or another state
• b.Twenty-four months of active licensure in any jurisdiction
• c.Sixty months of active licensure under a principal broker
• d.Thirty-six months of active licensure as an affiliate broker✓

A candidate licensed as an affiliate broker after May 12, 1988 needs thirty-six months actively licensed. The twenty-four month figure applies only to a candidate holding a baccalaureate degree with a major in real estate, or to someone licensed as an affiliate broker on or before May 12, 1988. Cite: Tennessee Real Estate Commission, Broker Licensure requirements, tn.gov/commerce/regboards/trec; T.C.A. 62-13-303.

What are the minimum age and general education requirements for a Tennessee affiliate broker applicant?

• a.Twenty-one years old, with an associate degree or higher
• b.Eighteen years old, with two years of college coursework
• c.Eighteen years old, with a high school diploma or equivalent✓
• d.Twenty-one years old, with a high school diploma or equivalent

The license law sets the minimum age at eighteen and requires a high school degree or a high school equivalency credential approved by the state board of education; the Commission asks for proof of high school graduation with the application. Cite: T.C.A. 62-13-303; Tennessee Real Estate Commission, Affiliate Broker Licensure requirements, tn.gov/commerce/regboards/trec.

How much continuing education must a Tennessee affiliate broker complete to renew?

• a.Sixteen hours during the preceding two-year license period✓
• b.Eight hours during the preceding two-year license period
• c.Thirty hours during the preceding two-year license period
• d.Twenty-four hours during the preceding two-year license period

An affiliate broker originally licensed on or after July 1, 1980 is ineligible for renewal unless at least sixteen hours of continuing real estate education were satisfactorily completed during the immediately preceding two-year license period. The Commission currently designates six of those hours as a CORE course, leaving ten elective hours. Cite: Tenn. Comp. R. & Regs. 1260-05-.12(3)(a); Tennessee Real Estate Commission, licensure pages, tn.gov/commerce/regboards/trec.

Can a Tennessee affiliate broker use the Office or Brokerage Management course for continuing education credit?

• a.Yes, and it counts for the full thirty hours of credit
• b.Yes, but only half of its hours count toward the sixteen
• c.Yes, if the affiliate broker supervises unlicensed assistants
• d.No, that course is not approved as affiliate broker education✓

The rule states that the office or brokerage management course required of broker applicants will not be approved as a post-licensing or continuing education course for affiliate brokers. A separate rule also denies credit for repeating course content already credited in the same renewal period. Cite: Tenn. Comp. R. & Regs. 1260-05-.12(2); 1260-05-.14.

Which Tennessee licensees must carry errors and omissions insurance?

• a.Every licensee, whether the license is active, inactive or retired
• b.Active licensees, but not those inactive or in retired status✓
• c.Principal brokers only, whose policy covers the whole firm
• d.Brokers and firms, but not individually licensed affiliate brokers

Carrying errors and omissions insurance covering all activities under the Broker License Act is a requirement for an active licensee; a licensee who places the license in inactive or retired status need not carry it until the license is activated, at which point a prorated premium applies. The principal broker must ensure every affiliated licensee holds it. Cite: Tenn. Comp. R. & Regs. 1260-01-.15; 1260-01-.16(2)(a).

A Tennessee license has been expired for more than one year. What does the Commission require to get it back?

• a.Payment of the renewal fee plus accrued monthly penalty fees
• b.A signed reinstatement order and proof of continuing education
• c.Reapplying, meeting current education rules and retesting✓
• d.A medical waiver request supported by a signed doctor's statement

Once a license has been expired for more than one year the individual must reapply for licensure, meet current education requirements, and pass all required examinations. Penalty-fee reinstatement and the reinstatement order apply to shorter lapses, and the medical waiver covers a failure to renew within sixty days caused by health issues. Cite: Tenn. Comp. R. & Regs. 1260-01-.21(1)-(3).

How must a Tennessee applicant submit fingerprints for the required criminal background check?

• a.Electronically, through the company contracted by the state✓
• b.On ink cards mailed directly to the Commission's Nashville office
• c.On ink cards taken at any local police or sheriff's department
• d.Electronically, through the applicant's own principal broker

Fingerprints must be submitted in an electronic format, with the applicant arranging and paying for processing through the private company contracted by the state to transmit classifiable prints to the TBI and FBI. Former licensees who must reapply are treated as initial applicants for this purpose. Cite: Tenn. Comp. R. & Regs. 1260-01-.17.