Humber/Ontario Real Estate Course 4 Exam Practice

In a seller agency relationship, who is the principal?

1. The salesperson working for the cooperating brokerage.

2. The listing salesperson.

3. The seller represented by a brokerage.

4. The buyer represented by a cooperating brokerage.

5. The mortgage lender providing financing for the buyer.

6. The home inspector hired by the buyer.

The correct answer is: The seller represented by a brokerage.

The principal in a seller agency relationship is the seller represented by a brokerage. In this context, the principal is the individual who grants authority to the broker to act on their behalf in the sale of their property. The seller enters into a listing agreement with the brokerage, which provides the brokerage the right to market and negotiate the sale of the property, ensuring that the seller's interests are prioritized throughout the transaction. This relationship establishes a legal obligation for the brokerage to act in the best interest of the seller, reinforcing the idea that the seller is the focal point of this agency relationship. Other parties mentioned, such as the buyer or any service providers like inspectors and mortgage lenders, do not hold the status of principal in this context, as they are not the ones granting agency authority to the brokerage. Instead, they may have their own representation or roles in the transaction but do not directly define the seller agency relationship.