A real estate broker wrote a full-price offer of $350000 for a buyer. The earnest-money deposit was $25000. The offer was accepted and the broker placed the deposit in her escrow account. The next week the parties cancelled the contract in writing and asked the broker to return the deposit. Which is TRUE?

The broker must return the deposit unless specifically authorized otherwise

The broker must negotiate for her commission out of the deposit

The broker must return the deposit unless specifically authorized otherwise

The broker may subtract one-half of her commission before returning the deposit

The broker has earned a commission and may automatically subtract the entire amount before returning the balance

A firm has six branch offices. Each branch office MUST have

a separate principal broker for each branch office

at least one affiliate broker at each branch office

an affiliate broker to supervise each branch office

A licensee can advertise property solely under their own name

with the principal broker’s approval

as long as the listing price is included in the ad

Who is ultimately responsible for all trust-account funds received by a firm?

The principal broker of the firm

The affiliate broker who accepted the funds

The principal broker of the firm

Tennessee Real Estate Exam Practice Test

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Question 1

The Real Estate Commission does NOT have the power to

Your Answer: Option(s)

Correct Answer: Option(s) C

Rationale

The Real Estate Commission does NOT have the power to regulate commission rates.

The Real Estate Commission's role is primarily to oversee the licensing and conduct of real estate professionals rather than to dictate the commission rates they may charge. Commission rates are typically determined by market conditions and negotiations between the parties involved, which is outside the Commission's regulatory authority.

A) suspend or revoke real estate licenses
The Real Estate Commission has the authority to suspend or revoke real estate licenses as part of its regulatory responsibilities. This power is exercised to ensure compliance with real estate laws and to protect consumers from unethical practices, thus maintaining professional standards within the industry.

B) subpoena witnesses for its investigations
The Commission possesses the power to subpoena witnesses during its investigations to gather necessary information and evidence. This authority is essential for enforcing laws and regulations within the real estate sector, allowing the Commission to conduct thorough inquiries into potential violations.

C) regulate commission rates
As previously stated, the Real Estate Commission does not have the authority to set or regulate commission rates. These rates are typically established through agreements between real estate professionals and their clients, reflecting the competitive nature of the market rather than a regulatory mandate.

D) review broker's escrow or trustee accounts
The Real Estate Commission is empowered to review broker's escrow or trustee accounts to ensure compliance with legal and ethical standards. This review process helps safeguard client funds and maintains the integrity of financial transactions in the real estate market.

Conclusion
The Real Estate Commission plays a crucial role in regulating the conduct of real estate professionals, including the authority to suspend licenses, subpoena witnesses, and review financial accounts. However, it does not have the power to regulate commission rates, which remain subject to market dynamics and individual negotiations. Understanding these distinctions is vital for both real estate professionals and consumers navigating the industry.

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The Real Estate Commission does NOT have the power to regulate commission rates.

The broker must return the deposit unless specifically authorized otherwise.

A firm has a designated office manager for each branch office.

A licensee can advertise property solely under their own name if they own the property.

The principal broker of the firm is ultimately responsible for all trust-account funds received by a firm.

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The Real Estate Commission does NOT have the power to regulate commission rates.

The broker must return the deposit unless specifically authorized otherwise.

A firm has a designated office manager for each branch office.

A licensee can advertise property solely under their own name if they own the property.

The principal broker of the firm is ultimately responsible for all trust-account funds received by a firm.

Free Preview Ended

Unlock Full Access

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