From whom does a licensee receive compensation in Tennessee?
Question & Answer
Review the question and all answer choices
The buyer
Buyers may provide funds that ultimately compensate the brokerage, but compensation does not come directly from the buyer to the individual licensee. Funds flow through the principal broker who then distributes compensation according to their agreement with the licensee.
The seller
While sellers typically pay commission, the funds do not go directly to the individual licensee. The seller pays the brokerage, and the principal broker then distributes compensation to the licensees who worked on the transaction.
Themselves
Licensees cannot pay themselves directly as this would bypass the required supervision and accounting procedures established by the Tennessee Real Estate Commission. All compensation must flow through the principal broker.
The principal broker
Why is this correct?
In Tennessee, licensees must receive compensation through their principal broker because the broker holds the license and is legally responsible for all transactions and activities. This structure ensures proper supervision, accounting, and compliance with state regulations.
Continue Learning
Explore this topic in different formats
More Practice of Real Estate Videos
Continue learning with related video lessons
What is the max civil penalty per violation in Minnesota?
2:52 • 0 views
If an auditor visits a broker's office in Ohio, how many years of records are required?
2:47 • 0 views
Is commingling legal in Mississippi?
2:50 • 0 views
Utah license law has three levels of licensure. What are they?
2:03 • 0 views
Georgia has real estate license reciprocity agreements with which states?
2:44 • 0 views
Ready to Ace Your Real Estate Exam?
Access 2,000+ free video lessons covering all 11 exam topics.