Humber/Ontario Real Estate Course 4 Exam Practice

When a brokerage has made efforts to find a buyer for a property but the seller is unaware and trying to sell it personally, what is the status of their relationship?

1. An implied agency exists

2. The seller owes reasonable expenses to the brokerage

3. The brokerage is considered an agent while the seller is the principal

4. No agency relationship exists

5. The seller must pay a commission to the brokerage

6. The brokerage has an equitable interest in the sale

The correct answer is: No agency relationship exists

In this scenario, when a brokerage has made efforts to find a buyer for a property without the seller's knowledge or consent, the relationship between the seller and the brokerage can best be characterized as one where no formal agency relationship exists. An agency relationship requires mutual agreement and understanding between the parties involved, and in this case, the seller is unaware of the brokerage's efforts, which means there has been no acknowledgment or acceptance of an agency. The absence of a formal agreement indicates that the seller is not bound by any obligations to the brokerage, including the payment of commissions or recognition of an agency status. An agency relationship typically involves consent, which is lacking here since the seller is actively trying to sell the property on their own, independent of the brokerage's activities. Thus, the correct interpretation reflects that the seller and the brokerage do not have an agency relationship in this situation.