Tennessee Real Estate Affiliate Broker Exam — All Questions
12 questions
Under Tennessee law, a licensee who does not represent either party but assists them in completing a transaction acts as a:
- a.Designated agent
- b.Facilitator (transaction broker)✓
- c.Dual agent
- d.Subagent
Tennessee recognizes the 'facilitator,' sometimes called a transaction broker, who assists parties in a transaction without representing either as an agent. A facilitator does not owe the full fiduciary duties of an agent but must still be honest and disclose known adverse facts.
When two different affiliate brokers in the same Tennessee firm represent the buyer and the seller in one transaction, the firm may appoint them as:
- a.Dual agents for both parties
- b.Designated agents, each representing one party✓
- c.Facilitators for the whole firm
- d.Subagents of the buyer
Tennessee allows designated agency: the principal broker may designate different affiliate brokers within the firm to represent the buyer and the seller separately, so each client still receives individual representation rather than the firm acting as a dual agent.
Under Tennessee law, what is a licensee's status toward a party before any written agency agreement is signed?
- a.A subagent of the listing broker by operation of law
- b.A facilitator who is not an agent or advocate of any party✓
- c.A limited agent of whichever party first contacted the firm
- d.A dual agent until the party elects single agency in writing
Tennessee treats a licensee as a facilitator, not an agent or advocate, until the licensee enters a written bilateral agreement establishing the terms of an agency or subagency relationship. Agency does not arise from contact, showings or custom. Cite: T.C.A. 62-13-401.
Which act by itself establishes an agency relationship with a Tennessee seller?
- a.Showing the seller's house to a prospective buyer
- b.Accepting an earnest money deposit from a buyer
- c.Giving the seller a written analysis of the local market
- d.Executing an exclusive right to sell listing agreement✓
The statute states that negotiating and executing either an exclusive agency listing agreement or an exclusive right to sell listing agreement with a prospective seller establishes an agency relationship with that seller. Services performed before such an agreement are performed as a facilitator. Cite: T.C.A. 62-13-401.
Which duty does a Tennessee licensee owe to every party in a transaction, not just to a client?
- a.Loyalty, placing that party's interests before all others
- b.Obedience to that party's lawful instructions
- c.Disclosure of adverse facts the licensee actually knows✓
- d.Advice on whether the agreed contract price is a fair one
The duties owed to all parties include disclosing adverse facts of which the licensee has actual notice or knowledge, exercising reasonable skill and care, acting with honesty and good faith, and timely accounting for trust funds. Loyalty and obedience are client duties under the separate section. Cite: T.C.A. 62-13-403; T.C.A. 62-13-404.
How long does a Tennessee licensee's duty of confidentiality to a party last?
- a.It survives both the agency relationship and the closing✓
- b.Until the transaction closes and the funds are disbursed
- c.Until the agency agreement is terminated by either party
- d.Three years, matching the transaction record retention rule
The confidentiality duty owed to all parties expressly continues after termination of any agency relationship and after the transaction closes. The three-year figure belongs to the record retention requirement, which is a different obligation. Cite: T.C.A. 62-13-403(3).
Two designated agents in the same Tennessee firm represent the buyer and the seller. What does the statute say about their knowledge?
- a.Each designated agent is deemed to know what the other knows
- b.No knowledge is imputed among the clients, broker and agents✓
- c.The managing broker becomes a dual agent by operation of law
- d.The clients must be told in writing that the firm is a dual agent
Tennessee's designated agency provision states there is no imputation of knowledge or information among or between clients, the managing broker and any designated agent in a designated agency situation, and the managing broker is not treated as a dual agent where each designated agent represents only one party. Cite: T.C.A. 62-13-406.
When must a Tennessee licensee verbally disclose his agency status to a buyer nobody represents?
- a.At the first showing of a property that the buyer requests
- b.When the buyer asks which party the licensee represents
- c.Before the buyer signs the purchase contract at the closing
- d.Before any real estate services are provided to that buyer✓
A licensee who personally assists an unrepresented buyer or seller must verbally disclose his facilitator, agent, subagent or designated agent status before any real estate services are provided. Waiting for the consumer to ask is not compliance. Cite: T.C.A. 62-13-405(a).
By when must that agency-status disclosure be confirmed in writing with an unrepresented buyer?
- a.Before the purchase contract is accepted by the seller
- b.Within three days after the offer to purchase is signed
- c.Before an offer to purchase is prepared for that buyer✓
- d.At the closing, on the settlement statement signed there
With an unrepresented buyer the disclosure must be confirmed in writing prior to the preparation of an offer to purchase; with an unrepresented seller it is confirmed before a listing agreement is executed or an offer is presented, whichever comes first. The licensee must then obtain a signed receipt. Cite: T.C.A. 62-13-405(b).
Which sale is exempt from Tennessee's agency-status disclosure requirement?
- a.A residential building containing five or more dwelling units✓
- b.A duplex occupied by the owner of the building being sold
- c.A vacant residential lot in a newly recorded subdivision
- d.A condominium unit that the buyer intends to rent out to tenants
The disclosure section does not apply to transfers of commercial property, sales at public auction, residential property containing more than four units, or rental transactions. A four-unit or smaller residential sale, including a duplex or a condominium unit, remains covered whatever the buyer plans to do with it. Cite: T.C.A. 62-13-405(e).
Tennessee rules require a licensee signing an exclusive buyer representation agreement to confirm what to the buyer in writing?
- a.That the buyer may cancel the agreement within three days
- b.That the buyer's agent is paid only by the listing broker
- c.That the buyer may work with one other licensee at a time
- d.That the buyer should arrange viewings through the licensee✓
The rule requires written confirmation of three points: that the buyer should make all arrangements to view or inspect property through the licensee and not contact other licensees directly, that the buyer should tell any other licensee he is represented, and whether a commission is owed if the buyer buys without the licensee's assistance. Cite: Tenn. Comp. R. & Regs. 1260-02-.36.
A Tennessee affiliate broker buys a house for herself from a private seller. What do the Commission's rules require?
- a.That her principal broker also sign the purchase contract
- b.That she identify herself as a licensee in the transaction✓
- c.That she pay her firm a commission on her own purchase
- d.That she deposit the earnest money in the firm's escrow
The personal interest rule requires all licensees to identify themselves as a licensee when buying or selling property for themselves, and requires full disclosure of the licensee's true position before acquiring any interest in property listed with the licensee or the firm. Cite: Tenn. Comp. R. & Regs. 1260-02-.11.