Humber/Ontario Real Estate Course 1 Exam Practice

How can a brokerage establish an agency relationship with a seller?

1. That relationship can be either in writing or verbal

2. That relationship must be supported with a written, signed agreement between the seller and the brokerage

3. The brokerage is not obligated to prepare a written agreement and submit it to the seller

4. The brokerage must provide a copy of a signed written agency agreement to the seller within 48 hours of the seller signing it

The correct answer is: That relationship must be supported with a written, signed agreement between the seller and the brokerage

A brokerage can establish an agency relationship with a seller by having a written, signed agreement between the seller and the brokerage. This written agreement formalizes the relationship and outlines the roles, responsibilities, and expectations of both parties involved. Having a signed document helps to prevent misunderstandings and clearly states the terms of the agency, providing legal clarity and protection in real estate transactions. A verbal agreement may create ambiguity and does not provide the same level of enforceability or detail as a written one. While it might seem convenient to establish an agency verbally, it lacks the necessary documentation that can be crucial in establishing legal rights and responsibilities in case of disputes. In terms of requirements, this written agreement is not just a procedural formality; it is a legal obligation that ensures that both the seller and the brokerage are on the same page regarding their transaction. Furthermore, providing a copy of the signed agreement to the seller serves as an additional layer of transparency in the relationship. However, the main focus is on the necessity of having that written agreement to solidify the agency relationship.