Tennessee Realtor State Practice Exam

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Under what condition can real estate licensees offer gifts or prizes to their clients?

The gifts must be given anonymously.
The market value of the gift is disclosed.
The gifts must be valued under $50.
The gifts can only be given post-closing.

The correct answer is: The market value of the gift is disclosed.

A real estate licensee is allowed to offer gifts or prizes to clients under the condition that the market value of the gift is disclosed. This requirement ensures transparency and helps maintain ethical standards within the industry. By disclosing the market value, clients can make informed decisions and understand the significance of the gift in relation to their transaction. It also helps to avoid any appearance of impropriety or coercion that could arise from undisclosed incentives. The other options do not align with ethical practices or legal requirements in real estate transactions. For example, gifts given anonymously could create suspicion and questions regarding the motivations behind the gift. Setting a specific value limit, such as under $50, may not be a legal stipulation in all cases; rather, the key aspect is the disclosure of value rather than an arbitrary monetary threshold. Additionally, while some businesses may choose to give gifts after closing, there are no prohibitions against offering gifts at different stages of the transaction as long as the value is disclosed. Each of these alternatives fails to uphold the principle of transparency that is critical in real estate dealings.