TENNESSEE LICENSE LAW FINAL EXAM 2026/2027
QUESTIONS AND SOLUTIONS RATED A+
✔✔An exclusive listing agreement is governed by - ✔✔agency law and contract law.
✔✔Which of the following contracts must be in writing?
-An exclusive right to sell agreement
-A month-to-month lease
-A net listing
-A commission schedule - ✔✔An exclusive right to sell agreement
✔✔If a firm does not receive or handle the funds of others, which of the following is true:
-The firm may not pay commissions to its employees.
-The principal broker may receive a waiver of the requirement to maintain an escrow
fund.
-The firm may not perform real estate services.
-The firm does not need to have a principal broker. - ✔✔The principal broker may
receive a waiver of the requirement to maintain an escrow fund.
✔✔A broker may properly disburse funds upon - ✔✔upon the order of a court of
competent jurisdiction.
✔✔If an escrow account earns interest, who does the interest belong to? - ✔✔Whoever
is specified in the written agreement
✔✔In which of the following circumstances could a broker properly release funds held in
escrow?
-The buyer issues a written instruction to the broker.
-The seller documents that the funds will be used only to make repairs.
-The transaction closes.
-The broker has earned a commission but the transaction is stalled. - ✔✔The
transaction closes.
✔✔Escrow fund conversion is a form of - ✔✔theft
✔✔Which of the following must be specified in a contract authorizing a broker to place
funds in a trustee account?
-Terms for disbursement of funds
-The maximum amount that the fund may contain
-The depository institution in which the fund must be established
-The interest rate that the deposited funds must earn - ✔✔Terms for disbursement of
funds
, ✔✔An escrow account must clearly specify the terms and conditions for disbursement
and - ✔✔the name/address of the person who will actually hold the funds.
✔✔When can a broker deposit his own funds into an escrow account? - ✔✔To maintain
the account
✔✔An affiliate broker receives a check for earnest money from a purchaser. How soon
must she turn it over to her broker? - ✔✔Immediately on receiving it
✔✔Which of the following must be specified in a contract authorizing a broker to place
funds in a trustee account?
-Terms for disbursement of funds
-The maximum amount that the fund may contain
-The depository institution in which the fund must be established
-The interest rate that the deposited funds must earn - ✔✔Terms for disbursement of
funds
✔✔Which of the following agency relationships are not permitted in Tennessee?
-Undisclosed dual agency
-Disclosed dual agency
-Designated agency
-No agency - ✔✔Undisclosed dual agency
✔✔What kind of agency relationship is created by a listing agreement? - ✔✔Limited
Agency
-The agency relationship created between a licensee and a client to provide real estate
services, such as a listing agreement, is a limited agency.
✔✔Which best defines dual agent?
-The seller is not represented by the buyer's agent.
-The buyer's agent represents only the buyer.
-The listing broker represents the buyer.
-The listing broker represents both the seller and the buyer. - ✔✔The listing broker
represents both the seller and the buyer.
✔✔When is a seller required to give a written property disclosure or disclaimer to a
buyer? - ✔✔Before acceptance of a purchase contract
✔✔Agent Jim is working without a written agreement with buyer Al. This type of
relationship is known as - ✔✔facilitator
✔✔Which transfers of property are exempt from a disclosure report?
QUESTIONS AND SOLUTIONS RATED A+
✔✔An exclusive listing agreement is governed by - ✔✔agency law and contract law.
✔✔Which of the following contracts must be in writing?
-An exclusive right to sell agreement
-A month-to-month lease
-A net listing
-A commission schedule - ✔✔An exclusive right to sell agreement
✔✔If a firm does not receive or handle the funds of others, which of the following is true:
-The firm may not pay commissions to its employees.
-The principal broker may receive a waiver of the requirement to maintain an escrow
fund.
-The firm may not perform real estate services.
-The firm does not need to have a principal broker. - ✔✔The principal broker may
receive a waiver of the requirement to maintain an escrow fund.
✔✔A broker may properly disburse funds upon - ✔✔upon the order of a court of
competent jurisdiction.
✔✔If an escrow account earns interest, who does the interest belong to? - ✔✔Whoever
is specified in the written agreement
✔✔In which of the following circumstances could a broker properly release funds held in
escrow?
-The buyer issues a written instruction to the broker.
-The seller documents that the funds will be used only to make repairs.
-The transaction closes.
-The broker has earned a commission but the transaction is stalled. - ✔✔The
transaction closes.
✔✔Escrow fund conversion is a form of - ✔✔theft
✔✔Which of the following must be specified in a contract authorizing a broker to place
funds in a trustee account?
-Terms for disbursement of funds
-The maximum amount that the fund may contain
-The depository institution in which the fund must be established
-The interest rate that the deposited funds must earn - ✔✔Terms for disbursement of
funds
, ✔✔An escrow account must clearly specify the terms and conditions for disbursement
and - ✔✔the name/address of the person who will actually hold the funds.
✔✔When can a broker deposit his own funds into an escrow account? - ✔✔To maintain
the account
✔✔An affiliate broker receives a check for earnest money from a purchaser. How soon
must she turn it over to her broker? - ✔✔Immediately on receiving it
✔✔Which of the following must be specified in a contract authorizing a broker to place
funds in a trustee account?
-Terms for disbursement of funds
-The maximum amount that the fund may contain
-The depository institution in which the fund must be established
-The interest rate that the deposited funds must earn - ✔✔Terms for disbursement of
funds
✔✔Which of the following agency relationships are not permitted in Tennessee?
-Undisclosed dual agency
-Disclosed dual agency
-Designated agency
-No agency - ✔✔Undisclosed dual agency
✔✔What kind of agency relationship is created by a listing agreement? - ✔✔Limited
Agency
-The agency relationship created between a licensee and a client to provide real estate
services, such as a listing agreement, is a limited agency.
✔✔Which best defines dual agent?
-The seller is not represented by the buyer's agent.
-The buyer's agent represents only the buyer.
-The listing broker represents the buyer.
-The listing broker represents both the seller and the buyer. - ✔✔The listing broker
represents both the seller and the buyer.
✔✔When is a seller required to give a written property disclosure or disclaimer to a
buyer? - ✔✔Before acceptance of a purchase contract
✔✔Agent Jim is working without a written agreement with buyer Al. This type of
relationship is known as - ✔✔facilitator
✔✔Which transfers of property are exempt from a disclosure report?
