Tennessee Realtor State Practice Exam

Which activity is considered illegal if it violates the terms of a listing agreement?

1. Allowing a buyer to negotiate directly with the seller

2. Refusing to show the property to certain buyers

3. Providing feedback to the seller

4. Revealing a seller's motivations

The correct answer is: Allowing a buyer to negotiate directly with the seller

Allowing a buyer to negotiate directly with the seller can violate the terms of a listing agreement because such agreements typically grant exclusive rights to the listing agent or brokerage to represent the seller in all negotiations regarding the sale of the property. By circumventing this representation, the agent may breach their fiduciary responsibility to the seller, which includes advocating for the seller's interests and managing negotiations. This aspect is crucial in maintaining the contractual agreement established between the seller and the listing broker, which is designed to ensure that the seller has professional representation throughout the selling process. Engaging in direct negotiations without the representative's involvement undermines the agreement and can lead to legal repercussions for the agent in terms of breach of contract. In contrast, refusing to show the property to certain buyers may be a discriminatory practice, but it does not directly violate the terms of the listing agreement itself unless specific terms about showings are outlined. Providing feedback to the seller is generally an expected part of the agent’s role, and revealing a seller's motivations, while sensitive, can be a matter of communication that needs to be handled carefully but isn't a direct violation of the terms of the listing agreement.