Tennessee Realtor State Practice Exam

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What must Stan ensure before holding a lottery-style contest to drum up business?

Notify local authorities
Obtain his broker's approval
Collect entry fees from contestants
Advertise the contest widely on social media

The correct answer is: Obtain his broker's approval

Before holding a lottery-style contest to drum up business, it is essential for Stan to obtain his broker's approval. This requirement underscores the importance of adhering to the regulations and policies that govern real estate practices in Tennessee. Brokers are responsible for the activities of their agents, and any promotional events, like a contest, fall under their jurisdiction. Obtaining approval ensures that the contest aligns with the company's marketing strategy and complies with any relevant laws or ethical guidelines. While notifying local authorities may be necessary depending on the nature of the contest, and advertising is critical for participation, these actions come after ensuring that the broker is on board with the plan. Entry fees might typically apply to lotteries, but in real estate promotions, collecting fees can lead to legal concerns and is often discouraged without proper oversight. Thus, the most fundamental step is securing the broker's consent prior to proceeding with any public promotional event.