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.

When the sellers sign a listing agreement with the salesperson's realty company and broker, an agency relationship is established between the broker and the sellers. This relationship is formalized through the signed agreement, which outlines the obligations and responsibilities of the broker towards the sellers in the real estate transaction.

A (salesperson and the sellers.) YOUR ANSWER

While the salesperson may have a relationship with the sellers, the formal agency relationship is established primarily between the broker and the sellers. The salesperson acts on behalf of the broker, but the agency relationship is a legal contract with the broker as the principal.

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

In this scenario, the buyer is not directly involved in the establishment of the agency relationship as the question specifically addresses the contract signed by the sellers and the broker. The agency relationship pertains to the sellers and the broker, rather than involving the buyer at this stage.

C (salesperson and the broker.) YOUR ANSWER

Although the salesperson may have a relationship with the broker, the agency relationship relevant to the listing agreement is between the broker and the sellers. The salesperson operates under the broker's authority, but this does not constitute an agency relationship with the sellers directly.

D (broker and the sellers.) CORRECT

The broker is the entity that has entered into a formal agency relationship with the sellers through the listing agreement. This relationship mandates that the broker represents the interests of the sellers in the real estate transaction, establishing the agency legally.

Conclusion

In real estate, the establishment of agency relationships is governed by the contractual agreements signed by the parties involved. In this case, the signing of the listing agreement by the sellers with the broker creates a legal agency relationship between the broker and the sellers, which is critical for the representation and service provision in the transaction. Understanding these relationships is essential for all parties to navigate real estate transactions effectively.

broker and the sellers.

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