Free Tennessee Real Estate Practice Test (2026) — LicenseIQ

Question 1

Under the Code of Ethics, a REALTOR may NOT:

Accepted Answer

Article 15 prohibits knowingly or recklessly making false or misleading statements about other real estate professionals.

Question 2

A salesperson earns $6,000 on a $150,000 sale. What was the commission rate?

Accepted Answer

Rate = commission / sale price = $6,000 / $150,000 = 0.04 = 4%.

Question 3

Under §62-13-405, which statement about a licensee's duties regarding defects is correct?

Accepted Answer

Section 62-13-405(a) states licensees are not required to discover or disclose latent defects, while §62-13-403(2) requires disclosing adverse facts the licensee actually knows.

Question 4

A house is L-shaped: one section is 40 ft by 30 ft and the other is 20 ft by 15 ft. At $185 per square foot, what is the estimated cost to build?

Accepted Answer

Area = (40 x 30) + (20 x 15) = 1,200 + 300 = 1,500 sq ft; 1,500 x $185 = $277,500.

Question 5

The most common form of homeowner's insurance policy for a single-family home is the:

Accepted Answer

HO-3 (special form) is the most common homeowner's policy. HO-4 is renter's insurance and HO-6 is for condominium owners.

Question 6

Which client duties may be waived under §62-13-404?

Accepted Answer

Section 62-13-404(3) lists four assistance duties that apply unless specifically and individually waived in writing by the client. Honesty and adverse-fact disclosure are §62-13-403 duties to all parties and cannot be waived this way.

Question 7

A party making an offer to buy is the ____, and the party receiving it is the ____.

Accepted Answer

The offeror makes the offer; the offeree receives it. When a counteroffer is made, the roles swap.

Question 8

Which deed provides the GREATEST protection to the grantee?

Accepted Answer

A general warranty deed contains the fullest covenants, warranting title against all defects, including those arising before the grantor owned it.

Question 9

After passing the exam, a Tennessee affiliate broker candidate must apply for the license

Accepted Answer

Section 62-13-303(d) requires the application within one year of passing, or the exam must be retaken (subject to Commission waiver). The PSI bulletin likewise says the application is valid for 12 months from the exam date.

Question 10

In an affiliate broker's advertisement, the firm name must appear

Accepted Answer

Rule 1260-02-.12(3)(b) requires the firm name to be the same size or larger than any licensee or team name. Section 62-13-310(b) imposes the same rule for signs placed on properties.

Question 11

Three joint tenants own a property. One dies leaving a will that gives her share to her son. The son receives:

Accepted Answer

Survivorship operates outside the will; the deceased's interest goes to the surviving joint tenants.

Question 12

A firm's website displays an IDX feed of MLS listings from many firms. Which statement must appear on those pages?

Accepted Answer

Rule 1260-02-.12(5)(b) requires any page displaying listings from an outside database to state that some or all of the listings may not belong to the firm whose site is being visited.

Question 13

A new highway interchange built next to a residential subdivision lowers home values. This is:

Accepted Answer

Loss in value caused by factors outside the property boundaries is external obsolescence.

Question 14

A Tennessee home is appraised at $280,000, and the local tax rate is $3.00 per $100 of assessed value. What is the annual property tax?

Accepted Answer

Residential property is assessed at 25% under §67-5-801. Assessed value = $280,000 x 0.25 = $70,000; tax = ($70,000 / 100) x $3.00 = $2,100. Using the 40% commercial ratio would give $3,360.

Question 15

A licensee representing the seller who learns the buyer will pay more than the offer must:

Accepted Answer

Loyalty and disclosure require the seller's agent to share material information that benefits the client. The agent owes the buyer-customer no confidentiality.

Question 16

Which person is exempt from Tennessee real estate licensing?

Accepted Answer

Section 62-13-104(a)(1)(B) exempts an attorney-in-fact under a duly executed and recorded power of attorney. The others perform brokerage acts for others for compensation, and the multi-owner property manager does not fit the resident manager exemption, which is limited to the property where the manager works.

Question 17

When an affiliate leaves a firm, the principal broker's supervisory responsibility for the affiliate's future acts ends when

Accepted Answer

Rule 1260-02-.02(1) states that the principal broker's supervisory responsibility for the licensee's future acts ends when the Commission receives the release form or online submission.

Question 18

Two Tennessee firms disagree over how a co-op commission should be split, and one asks TREC to order payment. TREC will most likely

Accepted Answer

Rule 1260-02-.02(8) states the Commission does not intervene in disputes between firms, brokers or affiliates over debts, loans, draws or commissions. The 21-day figure belongs to the earnest money disbursement rule, and the Recovery Account pays only consumer judgments, not licensee disputes.

Question 19

A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?

Accepted Answer

Area = 330 x 660 = 217,800 sq ft; 217,800 / 43,560 = 5 acres.

Question 20

Which is a permissible reason for a principal broker to disburse earnest money?

Accepted Answer

Rule 1260-02-.09(7) permits disbursement under a reasonable interpretation of the contract, a separate written agreement signed by all interested parties, at closing, on rejection or withdrawal of an offer, on filing interpleader, or by court order.

Question 21

After the buyer and seller sign a sales contract but before closing, the contract is:

Accepted Answer

A contract is executory while obligations remain to be performed; it becomes executed when fully performed (at closing).

Question 22

Two brokerages agree that one will work only on the east side of town and the other only on the west side. This is:

Accepted Answer

Dividing territories or customers among competitors eliminates competition and is illegal market allocation.

Question 23

The government's power to take private property for public use with just compensation is:

Accepted Answer

Eminent domain (exercised through condemnation) allows taking for public use with just compensation. Escheat applies when an owner dies without a will or heirs.

Question 24

Which duty does a seller's agent owe to a buyer who is a customer, not a client?

Accepted Answer

Customers are owed HARD duties - Honesty, Accounting, Reasonable skill and care, and Disclosure of material facts - but not loyalty, obedience or confidentiality.

Question 25

Under a land contract (contract for deed), during the payment period the buyer holds:

Accepted Answer

In an installment/land contract the buyer has equitable title and possession; the seller keeps legal title until the final payment.

Tennessee real estate practice test

1. Under the Code of Ethics, a REALTOR may NOT:

2. A salesperson earns $6,000 on a $150,000 sale. What was the commission rate?

3. Under §62-13-405, which statement about a licensee's duties regarding defects is correct?

4. A house is L-shaped: one section is 40 ft by 30 ft and the other is 20 ft by 15 ft. At $185 per square foot, what is the estimated cost to build?

5. The most common form of homeowner's insurance policy for a single-family home is the:

6. Which client duties may be waived under §62-13-404?

7. A party making an offer to buy is the , and the party receiving it is the .

8. Which deed provides the GREATEST protection to the grantee?

9. After passing the exam, a Tennessee affiliate broker candidate must apply for the license

10. In an affiliate broker's advertisement, the firm name must appear

11. Three joint tenants own a property. One dies leaving a will that gives her share to her son. The son receives:

12. A firm's website displays an IDX feed of MLS listings from many firms. Which statement must appear on those pages?

13. A new highway interchange built next to a residential subdivision lowers home values. This is:

14. A Tennessee home is appraised at $280,000, and the local tax rate is $3.00 per $100 of assessed value. What is the annual property tax?

15. A licensee representing the seller who learns the buyer will pay more than the offer must:

16. Which person is exempt from Tennessee real estate licensing?

17. When an affiliate leaves a firm, the principal broker's supervisory responsibility for the affiliate's future acts ends when

18. Two Tennessee firms disagree over how a co-op commission should be split, and one asks TREC to order payment. TREC will most likely

19. A rectangular parcel measures 330 feet by 660 feet. How many acres does it contain?

20. Which is a permissible reason for a principal broker to disburse earnest money?

21. After the buyer and seller sign a sales contract but before closing, the contract is:

22. Two brokerages agree that one will work only on the east side of town and the other only on the west side. This is:

23. The government's power to take private property for public use with just compensation is:

24. Which duty does a seller's agent owe to a buyer who is a customer, not a client?

25. Under a land contract (contract for deed), during the payment period the buyer holds:

Sources