Tennessee Realtor State Practice Exam

Which statement is true about affiliating with a broker?

1. You can sign agreements under your name only

2. All agreements are done in the name of your principal broker

3. Affiliating brokers have no client engagement contracts

4. You are allowed to work independently

The correct answer is: All agreements are done in the name of your principal broker

Affiliating with a broker means you are entering into a relationship where you operate under the umbrella of a principal broker. In this context, all transactions and agreements you undertake as a licensed real estate agent are conducted in the name of your principal broker. This structure is essential as it ensures that the principal broker retains liability for the transactions and interactions that take place under their brokerage. This practice is not only a matter of legal compliance but also serves to protect the interests of clients and consumers, as the principal broker is responsible for overseeing the actions of the affiliated agents. It also helps to maintain a coherent business framework where the principal broker provides resources and guidance, allowing agents to focus on their clients while operating within the broker's established policies and standards. The other options do not align with the established practices in real estate. Agents cannot independently sign agreements in their own names, as they must act under the authority of their broker. Additionally, while agents may engage clients, these engagements must be formalized through the broker, and independent work outside the brokerage's purview typically goes against regulatory standards.