Humber/Ontario Real Estate Course 1 Exam Practice

Which of the following is a true statement regarding a listing agreement in Ontario?

1. A listing agreement is legally binding once both parties sign.

2. A listing agreement must be registered with RECO.

3. Both parties must have a lawyer present at the signing of a listing agreement.

4. A listing agreement requires approval by a brokerage manager before it becomes valid.

The correct answer is: A listing agreement is legally binding once both parties sign.

A listing agreement is legally binding once both parties sign. This means that once the seller and the real estate professional have signed the agreement, they are both obligated to adhere to the terms outlined within it. The agreement serves as a contract that sets forth the responsibilities and expectations of both the seller and the agent, thereby creating enforceable legal obligations. In contrast, a listing agreement does not need to be registered with RECO (Real Estate Council of Ontario) to be considered valid, which eliminates the possibility of registration as a requirement. Additionally, there is no legal requirement for lawyers to be present when a listing agreement is signed. The process of entering into a listing agreement is typically facilitated by a real estate professional, meaning the involvement of a brokerage manager for approving the terms prior to signing is not necessary for the agreement's validity. Thus, the notion that a listing agreement becomes legally binding upon signature accurately reflects how contract law operates in this context.