Sellers with an existing buyer approach a licensee to create a contract. After a salesperson explains the services to be provided, the sellers sign a listing agreement with the salesperson's realty company and broker. The salesperson also signs the listing form. As a result, an agency relationship is established between or among the

Rationale

Broker and the sellers

In this scenario, an agency relationship is formed between the broker and the sellers when the sellers sign the listing agreement. The broker, representing the realty company, has the authority to act on behalf of the sellers in the sale of their property.

A (salesperson and the sellers) YOUR ANSWER

While the salesperson may interact with the sellers and explain services, the agency relationship is formally established through the listing agreement signed with the broker. The salesperson acts as an agent of the broker, not directly establishing an independent agency with the sellers.

B (buyer, the salesperson, and the sellers) YOUR ANSWER

This choice incorrectly includes the buyer as part of the agency relationship. The agency relationship is specifically between the sellers and the broker, with the salesperson representing the broker's interests, rather than establishing a direct connection with the buyer.

C (salesperson and the broker) YOUR ANSWER

Although the salesperson works under the broker, the agency relationship in question pertains to the sellers. The salesperson's relationship with the broker does not create an agency relationship with the sellers; rather, it reinforces the broker's agency over the sellers.

D (broker and the sellers) CORRECT

This choice correctly identifies the agency relationship established when the sellers signed the listing agreement with the broker. The broker is legally responsible for representing the interests of the sellers in the real estate transaction.

Conclusion

In real estate transactions, an agency relationship is formally created through signed agreements. Here, the signing of the listing agreement by the sellers establishes the agency relationship with the broker, allowing the broker to act on behalf of the sellers. The salesperson serves as an agent of the broker, facilitating the relationship but not establishing it directly with the sellers. Understanding these relationships is crucial for navigating real estate transactions effectively.

Broker and the sellers

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