Leasing License Practice Exam

What is the effect of a written listing agreement in establishing agency?

1. It creates an implied agency

2. It negates the need for disclosure

3. It establishes an express agency

4. It allows for dual agency without consent

The correct answer is: It establishes an express agency

A written listing agreement is significant in establishing a clear and formal relationship between the agent and the principal (the property owner). By entering into a written agreement, both parties explicitly agree on the terms of their relationship, including the responsibilities and duties of the agent. This is referred to as express agency. Express agency refers to a situation where the agent's authority is clearly defined and documented in writing. This type of agency is characterized by a mutual agreement where the principal gives the agent specific instructions and the agent agrees to act on behalf of the principal. Establishing express agency through a written listing agreement promotes transparency and clarity in the relationship. It allows both the agent and the principal to understand their rights and obligations, setting a foundation for the agency's operation and managing expectations throughout the transaction process. The other options do not accurately describe the consequence of a written listing agreement. Implied agency arises from actions and circumstances rather than a written document, while a listing agreement does require proper disclosures and does not facilitate dual agency without appropriate consent and disclosures to all parties involved.