Humber/Ontario Real Estate Course 3 Exam Practice

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Prepare for the Humber/Ontario Real Estate Course 3 Exam. Study with challenging questions and detailed explanations to enhance your understanding. Get ready to excel in your exam!

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Which of the following is true about the authority of a real estate brokerage?

Can incur expenses with the full expectation that the owner will reimburse the brokerage for such expenses.
Has the authority to perform its function through implied authorities, as well as express authorities in a representation agreement.
Has the authority under a seller representation agreement to sign the agreement of purchase and sale on behalf of the seller.
Has the implied authority to receive part or all of the purchase price, as well as a deposit.

The correct answer is: Has the authority to perform its function through implied authorities, as well as express authorities in a representation agreement.

The statement regarding the authority of a real estate brokerage highlights the concept of both implied and express authorities recognized in a representation agreement. When a brokerage enters into a formal representation agreement, it is typically granted express authority to act on behalf of a client. This means that the brokerage can perform certain actions that have been explicitly defined in the agreement. Additionally, implied authority allows the brokerage to engage in actions that are a reasonable and customary part of the real estate service, even if they are not specifically detailed in the agreement. This includes tasks that are necessary to effectively fulfill the duties laid out in the representation, showcasing the brokerage’s role in facilitating the transaction on behalf of the client. This combination of express and implied authority is essential for smooth transactions and ensures that the brokerage can operate effectively within the framework established by the client. Each of the other options presents certain limitations or inaccuracies regarding the authority of the brokerage, such as specific obligations or actions that may not universally apply to all brokerage-client relationships, defining areas that are typically outside the brokerage's authority unless expressly stated in the agreement.