Tennessee Real Estate Practice Exam

Can an affiliate broker offer a prize to clients that can be converted into cash?

1. Yes

2. No

3. Only under certain conditions

4. Only if disclosed

The correct answer is: No

In Tennessee, affiliate brokers, who are licensed real estate professionals operating under a managing broker, are not permitted to offer prizes to clients that can be converted into cash. This prohibition is in place to maintain ethical standards in real estate practices and avoid conflicts of interest or undue influence in real estate transactions. Offering a cash prize could create the appearance of unethical behavior, as it may encourage clients to act in a way that is not in their best interest, such as choosing one broker over another for monetary reasons rather than for quality of service. This regulation ensures a level playing field for all real estate professionals and promotes integrity within the industry. The focus is not only on incentivizing sales but on providing genuine value and service to clients. Understanding this regulation is crucial for affiliate brokers to ensure compliance with Tennessee's real estate laws.