Principles, Property, and Land Use Practice Question

Question

A client asks whether a fact should be disclosed for the Tennessee Affiliate Broker Exam involving loan-to-value and Tennessee Real Estate Commission. Which response best applies the rule? (Item 19)

Answer choices

1. A. Client funds may be mixed with business funds if the broker reconciles the account later.
2. B. The issue can be ignored if the parties want to close quickly.
3. C. Interpret the relationship between loan amount and property value in a way that fits Tennessee exam practice.
4. D. The rule applies only to commercial transactions and never to residential transactions.

Correct Answer

C. Interpret the relationship between loan amount and property value in a way that fits Tennessee exam practice.

Explanation

The correct answer is C because loan-to-value requires candidates to interpret the relationship between loan amount and property value. The Tennessee reference keeps the scenario tied to state licensing practice, while the other options rely on unsafe assumptions about oral custom, escrow, client preference, independent licensee authority, or ignoring written duties.

Question details

• Difficulty: medium
• Domain: Principles, Property, and Land Use
• Objective: loan-to-value

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