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A listing contract has expired with no offers received. The agency relationship between the seller and the listing broker

Rationale

Terminates automatically upon expiration of the listing.

Once a listing contract expires, the agency relationship between the seller and the listing broker is automatically terminated, regardless of whether any offers were received. This ensures clarity in the relationship and allows both parties to move forward without obligations tied to the expired contract.

A (may continue indefinitely if the seller and the broker agree to this orally) YOUR ANSWER

While oral agreements can be binding in certain contexts, in the case of an expired listing contract, the agency relationship does not continue unless a new agreement is established. The nature of listing contracts requires formal documentation, and simply agreeing verbally does not extend the agency relationship.

B (may continue until the broker provides a written notice of termination) YOUR ANSWER

This choice is incorrect because the agency relationship does not rely on a broker's notice to terminate; it concludes automatically upon expiration of the listing. The absence of any binding contract means there is no need for formal termination, as the agreement is already nullified.

C (was never legally binding since no licensed activity was performed) YOUR ANSWER

This statement is misleading, as the listing agreement is indeed binding as long as it is properly executed and signed, regardless of whether any offers were received. The legality of the contract does not hinge on the performance of licensed activities but rather on the agreement's terms and conditions.

D (terminates automatically upon expiration of the listing) CORRECT

This is the correct answer, as the expiration of a listing contract directly leads to the termination of the agency relationship. Once the contract's term ends, all obligations and rights associated with that contract cease, allowing both parties to pursue other opportunities.

Conclusion

In real estate transactions, the expiration of a listing contract signals the automatic termination of the agency relationship between the seller and the broker. This process avoids confusion and ensures that neither party is bound to obligations without a current agreement. Understanding this principle is vital for both sellers and brokers to navigate their responsibilities effectively.

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