Tennessee Real Estate Practice Exam

What does an Exclusive Listing Agreement authorize a real estate licensee to do?

1. Act as a client's exclusive agent for real estate transactions

2. Sell properties without a client’s consent

3. Negotiate contracts on behalf of the buyer only

4. Manage rental properties without a listing

The correct answer is: Act as a client's exclusive agent for real estate transactions

An Exclusive Listing Agreement authorizes a real estate licensee to act as a client's exclusive agent for real estate transactions. This means that the licensee has the legal authority to represent the client in the sale or purchase of property. The agreement typically stipulates that the agent will have exclusive rights to market the property and receive a commission if the property is sold, regardless of who finds the buyer. This exclusivity is critical because it ensures that the agent invests time and resources into marketing and selling the property, knowing they will receive compensation for their efforts. It also binds the client to work with that agent alone during the term of the agreement, providing clarity about roles and responsibilities in the real estate transaction. This structure helps establish a strong working relationship between the client and the agent, enhancing communication and strategic planning for a successful transaction.