National Real Estate Exam (PSI)General Principles of AgencyEasy
A property owner meets with a broker and, after discussing terms, both sign a written listing agreement authorizing the broker to market and sell the home. What type of agency relationship has been created?
- AExpress agency
- BImplied agency
- CAgency by estoppel
- DOstensible agency
Show answer & explanationAnswer & explanation
Correct answer: A. Express agency
An express agency is created when the parties explicitly agree, either orally or in writing, to establish the agency relationship. Signing a written listing agreement is the clearest example of express agency.
Why the other options are wrong
- B. Implied agency arises from conduct, not an explicit written agreement.
- C. Estoppel arises when a principal's conduct leads a third party to believe agency exists, not from a signed contract.
- D. Ostensible agency is another term for apparent authority, which is not based on an actual signed agreement.
Express Agency
An agency relationship created by explicit oral or written agreement between principal and agent.
- Most common form of real estate agency
- Can be oral or written, though listing agreements are typically required to be in writing
- Terms of authority are clearly stated in the agreement
Memory trick: Express = Explicit words or writing.