AgencyIntermediateArizona Exam

When does an agency relationship typically terminate in a real estate transaction?

AWhen an offer is submitted

BUpon closing and completion of the transactionCorrect

CWhen the listing agreement expires

DWhen the buyer's loan is approved

Why Upon closing and completion of the transaction Is Correct

Answer B: Upon closing and completion of the transaction

An agency relationship typically terminates upon the successful closing and completion of the transaction, which fulfills the purpose of the agency. It can also terminate by expiration, mutual agreement, or death of a party.

Exam Tip: Agency

Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.

Key Agency Terms in This Question

Agency

A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.

Listing Agreement

A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.

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Key Terms to Know

Agency

A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.

Listing Agreement

A contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.

Dual Agency

A situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.

Fiduciary Duty

The highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.

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Agency Law Guide

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