Humber/Ontario Real Estate Course 4 Exam Practice

When can an agency relationship in real estate be considered terminated?

1. When a mutual agreement is signed

2. When the offer is initially accepted

3. When the sale officially closes

4. When either party expresses interest in termination

5. When the client feels that fiduciary duties are complete

6. When buyer’s remorse is communicated

The correct answer is: When the sale officially closes

An agency relationship in real estate can be considered terminated at various points, but the completion of the sale—when it officially closes—marks a significant, straightforward end to that relationship. When the sale closes, the agent has fulfilled their primary fiduciary duty, which is to represent the client in the transaction of buying or selling property. The relationship typically ends because the specific purpose for which the agency was created has been fully accomplished. Furthermore, while other scenarios like mutual termination or buyer's remorse might lead to the dissolution of the agency relationship, they do not necessarily occur automatically. The acceptance of an offer indicates a progression towards a transaction but does not itself conclude the agency relationship until all contractual obligations are fulfilled. Thus, terminating the relationship upon the closure of a sale clearly reflects the completion of that purpose and fosters clarity in later dealings, such as post-sale responsibilities or potential future relationships.