Humber/Ontario Real Estate Course 3 Exam Practice

In the case of changing brokerages with active listings, what step must be taken concerning seller agreements?

1. Notify the Real Estate board for approval.

2. Complete a new listing agreement after cancellation.

3. Transfer all listings directly.

4. Inform sellers but no action is needed.

5. Apply for a special permit transfer.

6. Leave the listings with the original brokerage.

The correct answer is: Complete a new listing agreement after cancellation.

Completing a new listing agreement after cancellation is essential when changing brokerages with active listings. This is because the original listing agreements are legally binding contracts between the seller and the original brokerage. When an agent decides to move to a new brokerage, the agreements with clients must be addressed to ensure compliance with real estate laws and regulations. The process typically involves cancelling the existing agreements with the original brokerage, which may require notifying the seller and obtaining their consent. Once the cancellation is in place, the new brokerage can create new listings and agreements that reflect the change in representation. This ensures that the interests of both the seller and the agent are properly aligned under the new brokerage. This step is crucial not only for maintaining professional integrity but also for protecting the rights of both parties involved. It establishes a clear and enforceable agreement under the new brokerage, thus avoiding any potential legal disputes related to the listings.