Tennessee Realtor State Practice Exam

Which action is considered a violation of license law in Tennessee?

1. Accepting a referral fee

2. Advertising without the brokerage name

3. Holding an open house

4. Using a personal business card

The correct answer is: Advertising without the brokerage name

Advertising without including the brokerage name is a violation of license law in Tennessee because it undermines the requirement for transparency and accountability in real estate transactions. In Tennessee, real estate professionals are required to clearly identify the brokerage under which they operate in all advertising materials. This regulation is in place to ensure that consumers can easily identify the company and its agents, fostering trust and maintaining the integrity of the real estate profession. Engaging in advertising activities without the brokerage name can lead to consumer confusion and may result in the misrepresentation of the agent's authority, thereby potentially harming the reputation of the brokerage itself. On the other hand, accepting a referral fee is permissible as long as it complies with the regulations set forth by the Tennessee Real Estate Commission. Holding an open house and using a personal business card are also accepted practices within the framework of the law, as long as they adhere to the guidelines of being clear about the agent's affiliation with the brokerage.