Humber/Ontario Real Estate Course 4 Exam Practice

When Buyer Singh hesitates to sign an exclusive buyer representation agreement, which understanding is correct according to REBBA?

1. He must sign to create a valid agreement.

2. Signing creates a valid agreement with the salesperson’s brokerage.

3. Signing creates an express agreement with definite terms between him and the brokerage.

4. Signing grants authority to locate property for sale but not for lease.

5. He cannot negotiate terms before signing.

6. He can terminate the agreement at any time without penalty.

The correct answer is: Signing creates an express agreement with definite terms between him and the brokerage.

The rationale behind the assertion that signing creates an express agreement with definite terms between Buyer Singh and the brokerage lies in the nature of exclusive buyer representation agreements. When such an agreement is signed, it formalizes the relationship and outlines specific rights and obligations for both parties, providing clarity on the scope of the representation, duties of the agent, and the duration of the agreement. This express agreement is essential as it sets out the expectations and responsibilities in the real estate transaction, ensuring that both the buyer and the brokerage are clear on what is expected of one another. Signing the agreement doesn't just signify a commitment; it essentially creates a legally binding document that details the terms under which the representation is conducted, making it fundamental for the buyer to understand what they are agreeing to. By defining these terms, it also aids in guiding Buyer Singh regarding his rights, what services he can expect, and any obligations he might have, ensuring transparency in the relationship from the start.