Humber/Ontario Real Estate Course 3 Exam Practice

What should be included in a listing agreement between a seller and a brokerage?

1. Market analysis of surrounding properties.

2. Detailed property features and conditions.

3. Evaluation of future property value trends.

4. Inspection reports from the last 5 years.

5. Negotiated commission rate and payment terms.

6. List of potential buyers interested in the property.

The correct answer is: Negotiated commission rate and payment terms.

In a listing agreement between a seller and a brokerage, it is essential to include the negotiated commission rate and payment terms. This element defines the financial agreement between the seller and the brokerage for the services provided in facilitating the sale of the property. The commission rate is typically a percentage of the sale price and serves as the brokerage's compensation for their marketing and sales efforts. By specifying payment terms clearly in the agreement, both parties establish mutual understanding and expectations regarding financial arrangements, which helps avoid misunderstandings in the future. Other elements, while important in the context of the sale process, do not typically form a core part of the listing agreement itself. For instance, while a market analysis, detailed property features, and future value trends may contribute to the overall strategy for selling a property, they do not directly dictate the contractual and financial relationships outlined in a listing agreement. Similarly, while inspection reports and lists of potential buyers can support the sales efforts, they are often considered supplementary information rather than mandatory components of the listing agreement itself.