Real Estate Tests
 The outline

In Tennessee you are
a facilitator first.

Forty scored questions in eighty minutes, scored separately from the national portion. Tennessee uses its own vocabulary and its own rules, and a candidate answering from national habit will lose questions they thought they knew: the entry license is the affiliate broker, agency is never implied and a licensee is a facilitator until a written bilateral agreement says otherwise, earnest money is deposited promptly on acceptance rather than within three banking days, cash rebates are flatly prohibited, and failing to deliver the property disclosure gives the buyer no right to terminate at all.

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This is the Tennessee state portion for the affiliate broker license. It assumes you are also working through the national portion, which is a separate 80 questions scored separately and covered on the other pages of this set. Tennessee law changes: TREC revises its rules and the figures below were checked in August 2026. Before you rely on any deadline here, check it against the current chapter 1260 rules and against tn.gov/commerce/regboards/trec. This is study material, not legal advice.
ON THIS PAGE
Forty questions, and advertising is the heaviest area on the list You are a facilitator until you sign something saying otherwise The heaviest area: seven questions on how you may say your name Escrow, records, and the money a Tennessee licensee may not touch The Commission, the license, and the disclosure that carries no remedy
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Forty questions, and advertising is the heaviest area on the list

Tennessee's entry-level license is the affiliate broker, not a salesperson. The word salesperson appears in the Broker License Act only for time-share salespersons. Getting the vocabulary right is not pedantry here — the exam is written in it, and so are the answer options.

The affiliate broker examination is taken through PSI: 80 scored national questions in 160 minutes and 40 scored state questions in 80 minutes, each portion passed at 70 per cent, each scored separately. Pass one and fail the other and you retake only the part you failed.

SCORED QUESTIONS OUT OF 40 Advertising and Marketing Area 3 7 (18%) Agency and Disclosure Issues Area 8 6 (15%) Broker and Affiliate Relationships Area 4 5 (12%) Duties and Powers of the Commission Area 1 4 (10%) Licensing Requirements Area 2 4 (10%) Handling Documents and Record Keeping Area 5 4 (10%) Handling Trust and Escrow Funds Area 6 4 (10%) Improper Activities and Consumer Protection Area 7 3 (8%) Special Areas of Practice Area 9 3 (8%) Advertising is the heaviest area, ahead of agency and well ahead of escrow. Advertising and marketing is 7 of the 40 questions and trust and escrow funds is 4. Most study material has that the other way round, and spends its pages on the escrow account. The Tennessee advertising rule is unusually detailed - firm name sizing, the one-click social media rule, franchise naming, team names - which is presumably why the examiner weights it so heavily.
The published Tennessee outline for affiliate brokers. Nine areas, and the distribution is the opposite of most study material: advertising outweighs the escrow account by almost two to one.
Why advertising is worth seven questions
Because the Tennessee advertising rule is unusually specific and unusually easy to break. It sets the relative size of the firm name, it reaches email signatures and social media posts, it has a one-click rule for social media, it bans franchise-name-only advertising, and it constrains what a team may call itself. Seven questions is the examiner telling you where licensees actually get into trouble.
AREA 8

You are a facilitator until you sign something saying otherwise

This is the most Tennessee thing on the examination, and the single item most likely to be answered wrong from national habit. In most states a licensee who starts helping a buyer drifts into some kind of agency. In Tennessee, agency cannot arise that way.

Tennessee Code 62-13-401, in its own words
"Until such time as a licensee enters into a specific written agreement to establish an agency relationship with one or more parties to a transaction, the licensee shall be considered a facilitator and shall not be considered an agent or advocate of any party to the transaction. An agency or subagency relationship shall not be assumed, implied or created without a written bilateral agreement." Note bilateral: a disclosure form the licensee hands over, however clearly it says "buyer's agent", is one-sided and creates nothing. 62-13-405(c) says so expressly.

A facilitator may advise either or both parties and may still be paid a commission. What a facilitator may not be is an advocate. And when a licensee is engaged as an agent, Tennessee calls it a limited agent: since 1 January 1996 the statutory duties in 62-13-403 and 62-13-404 have superseded the common law fiduciary duties entirely. That is a real difference from Arkansas, which kept the common law.

Owed to The duty Citation
All parties Reasonable skill and care; disclose adverse facts the licensee actually knows; confidentiality; honesty and good faith; market information from public records on request; timely accounting for trust deposits; and no self-dealing without prior disclosure and the timely written consent of all parties. 62-13-403
The client only Advocacy — promoting the client's interests, advising on price and terms, and the rest of what a limited agent does. 62-13-404
  1. 1
    First, verbally, before any services are provided
    The licensee verbally discloses their status — facilitator, agent, subagent or designated agent — before providing real estate services (62-13-405(a)).
  2. 2
    Then in writing, at different moments for the two sides
    For a buyer: before the offer to purchase is prepared. For a seller: before the listing agreement is executed or an offer is presented, whichever comes first. A signed receipt acknowledging the disclosure is required (62-13-405(b)).
  3. 3
    And immediately, licensee to licensee
    On first contact with another licensee, disclose your role and agency relationship, and promptly notify them of any change in it (62-13-405(d)).

The disclosure requirement does not apply to commercial property, property sold at public auction, residential property of more than four units, or residential leases and rentals (62-13-405(e)).

Designated agency, and the dual agency question people get wrong in both directions
Designated agent The managing broker appoints a licensee as the designated agent of a party, to the exclusion of every other licensee in the firm — by specific appointment or by written company policy. The managing broker is then not a dual agent. 62-13-406(a)
No imputation There is no imputation of knowledge or information among the clients, the managing broker and the designated agents. That is the mechanism which makes the whole arrangement work. 62-13-406(c)
Dual agency Still legal in Tennessee, with full written disclosure and the written consent of all parties — but disfavoured and rarely practised. Acting for more than one party is a violation only when done without that knowledge and written consent. 62-13-312(b)

Two claims circulate and both are wrong. "Tennessee abolished dual agency" is wrong — the definition is still in the code and TREC's own core course says it remains legal. "Designated agency is an alternative to dual agency" is also wrong at the firm level: designated agency is how Tennessee manages the conflict, not how it avoids the conflict existing.

AREA 3

The heaviest area: seven questions on how you may say your name

Rule 1260-02-.12 defines advertising broadly: signs, flyers, letterheads, email signatures, websites, social media communications, and video or audio streamed over the internet or broadcast. Promotional novelty items such as business cards are the exclusion.

Teams, under rule 1260-02-.41
All members affiliated with the same firm. No separate physical location from the firm office. Members paid by nobody but the principal broker. The principal broker may not delegate supervisory duties to the team and remains ultimately responsible. Teams may not hold themselves out as separate from the firm, and may not designate their own members as designated agents — that stays with the principal broker. A team name may not use Realty, Real Estate, Company, LLC, Corp or anything else implying an independent entity.

One more advertising-adjacent rule that catches people: rule 1260-02-.11 requires all licensees to identify themselves as a licensee when buying or selling property for themselves, and forbids a licensee acquiring an interest in property listed with them or their company without first disclosing their true position to the owner — and again to any prospective purchaser when offers come in afterwards.

AREAS 4, 5 AND 6

Escrow, records, and the money a Tennessee licensee may not touch

An affiliate broker in Tennessee never holds trust money and never has a trust account. Rule 1260-02-.09(3): "An affiliated broker shall pay over to the principal broker with whom he is affiliated all trust money immediately upon receipt."

The rule What Tennessee requires Where it says so
When it is deposited Trust money is deposited promptly upon acceptance of the offer, unless the offer itself says "Trust money to be deposited by: ___". There is no three-banking-days rule in Tennessee; a source that gives you one has imported another state. Rule 1260-02-.09(11)
Who is responsible The principal broker, at all times, for money accepted by them or by their affiliated brokers. Where the contract names someone else to hold it, the broker is relieved once that escrow agent receives it. Rule 1260-02-.09(4), (6)
Disputed earnest money Within 21 calendar days from receipt of a written request for disbursement, the broker must disburse it, interplead it, or turn it over to an attorney with instructions to interplead. The clock runs from the written request, not from the dispute arising. Rule 1260-02-.09(9)
Commingling Maintaining funds belonging to others in the same bank account as the licensee's personal or business funds. Lease and rental trust money must also sit in a separate escrow account from other trust money. Rule 1260-02-.09(1), (12)
Interest Neither required nor prohibited. If used: disclose at the time the contract is executed, get a written agreement on who receives the interest, and keep a detailed accounting per deposit. Rule 1260-02-.09(14)
Records Three years for escrow records, showing depositor, date of deposit, date of withdrawal and payee — and three years for transaction records generally. 62-13-321, 62-13-312(b)
Postdated checks Not accepted for trust money unless the offer provides for it. Rule 1260-02-.09(10)
Cash rebates, cash gifts and cash prizes are flatly prohibited
Tennessee Code 62-13-302(b): "A real estate licensee shall not give or pay cash rebates, cash gifts or cash prizes in conjunction with any real estate transaction." No disclosure cures it and no approval permits it. This is unusual, and the national instinct — that a rebate is fine as long as everyone knows — is the wrong instinct here. Non-cash gifts and prizes are permitted under rule 1260-02-.33, but only with the sponsoring firm's approval and written disclosure of the specifications, the fair market value, the time and place of delivery and any conditions attached.
AREAS 1, 2, 7 AND 9

The Commission, the license, and the disclosure that carries no remedy

Nine members, appointed by the Governor, five-year terms, and three from each of the three grand divisions — eastern, middle and western. Seven have been principally engaged as a licensed broker or affiliate broker in Tennessee for at least five years; two are not in the business at all. At least one member must be sixty or over and at least one a member of a racial minority. No member may succeed themselves for more than one full term.

The Education and Recovery Account
Funded by a fee paid alongside the original license fee, plus renewal assessments not exceeding 30 dollars, to keep a minimum balance of 500,000 dollars. Liability is capped at 15,000 dollars per transaction — regardless of how many people were harmed or how many parcels were involved — and 30,000 dollars in the aggregate for one licensee. The claimant must have a court judgment and must notify the Commission within thirty days of starting the action. When the account pays on a licensee's behalf, that license may, in the discretion of the Commission, be suspended or revoked. Many states make that automatic; Tennessee does not.
Getting and keeping the license The requirement The timing
Pre-license education 60 classroom hours, including 30 in basic principles Before the examination
Course for New Affiliates 30 classroom hours — 90 hours in total Before the license is issued, for anyone licensed after 31 December 2004. The code still carries superseded language about six months afterwards; the operative rule is pre-issuance
Errors and omissions insurance Individual coverage, as a condition of licensing. A firm may carry coverage in addition, never instead At issue and at every renewal. Lapse suspends the license; suspended more than a year and it is automatically revoked (62-13-112)
Continuing education 16 hours — 6 mandatory TREC core, 10 elective Every two-year cycle, by the license expiry date. Hours do not carry over
Broker: experience 36 months actively licensed, or 24 with a baccalaureate in real estate Before applying (62-13-303(c))
Broker: education 120 classroom hours, 30 of them Office or Brokerage Management Before or after affiliate licensure
The property disclosure that gives the buyer no right to walk
Tennessee Code Title 66 Chapter 5 Part 2 covers residential property of one to four dwelling units, whether or not a licensee is involved. The owner delivers either a Residential Property Disclosure Statement or, where the purchaser waives the disclosure, a Disclaimer Statement, and it must be delivered prior to acceptance of the purchase contract. Now the part that catches people: 66-5-203(b) says failure to provide it shall not permit a purchaser to terminate the contract, though other actions at law or in equity remain open. If your material gives the buyer three days to rescind, it is wrong for Tennessee. Twelve categories are exempt, and the one candidates miss is the absentee owner: an owner who has not resided on the property at any time within the three years before the transfer.