Tennessee Realtor State Practice Exam

What role does a transaction broker play in a real estate transaction?

1. Represents only the seller

2. Acts as a neutral party facilitating the transaction

3. Represents only the buyer

4. Provides legal advice to both parties

The correct answer is: Acts as a neutral party facilitating the transaction

A transaction broker plays a vital role by acting as a neutral facilitator in a real estate transaction, ensuring that both the buyer and seller have their interests supported throughout the process. This role involves assisting both parties in navigating the complexities of the transaction without taking a side, which can help to facilitate communication and negotiation. The transaction broker is responsible for providing essential information and ensuring that the paperwork is handled correctly, all while maintaining impartiality. This neutrality is beneficial for creating a smoother transaction, as both parties can feel secure that their interests are considered without aggressive representation on either side. The other roles outlined do not align with the function of a transaction broker. Representing only the seller or the buyer would indicate a more traditional agency relationship where one party's interests are prioritized, which is not the case for a transaction broker. Additionally, while providing legal advice is a crucial aspect of a real estate transaction, transaction brokers typically do not provide legal counsel; such advice should come from a qualified attorney. This distinction underscores the importance of the transaction broker's neutral position, focusing on facilitating the process rather than representing a specific party's interests.