Tennessee Realtor State Practice Exam

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Prepare for the Tennessee Realtor State Exam with questions and explanations designed to help you succeed. Master the principles and regulations of real estate in Tennessee. Ace your exam with confidence!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which of the following is considered an illegal type of listing in Tennessee?

Exclusive right-to-sell listing
Open listing
Net listing
Exclusive agency listing

The correct answer is: Net listing

In Tennessee, a net listing is regarded as an illegal type of listing agreement. This is primarily because net listings can lead to ethical issues and conflicts of interest between the agent and the seller. A net listing allows the agent to sell the property for any amount above a specified net price set by the seller. Any amount over that agreed net price would be considered the agent's commission. This arrangement can incentivize agents to undervalue the property to keep a larger commission, which is contrary to the best interests of the client and can be seen as self-serving behavior. In contrast, the other types of listings—exclusive right-to-sell, open, and exclusive agency listings—are all legal and commonly used in real estate transactions. These listings provide various structures and protections for both the seller and the agent, ensuring that the real estate transaction is carried out fairly and transparently. Thus, awareness of the legal standings of these listing types is crucial for real estate professionals operating in Tennessee.