PSI Virginia Real Estate Practice Exam

Which of the following will end an agency relationship?

1. Declining a price offer

2. Mutual agreement of both parties

3. Change of agency policy

4. Expiration of marketing materials

The correct answer is: Mutual agreement of both parties

An agency relationship can be concluded through a mutual agreement of both parties involved. This situation typically arises when both the principal (the client) and the agent (the real estate professional) come to a consensus to terminate the relationship. Such a mutual agreement might be based on a variety of reasons, including the completion of the transaction, a change in the client's needs, or dissatisfaction with the agent’s performance. The other options presented do not inherently lead to the termination of the agency relationship. For instance, declining a price offer is simply part of the negotiation process and does not in itself dissolve the agreement. Similarly, a change of agency policy does not automatically impact the specific agency relationship unless it directly affects the terms agreed upon by both parties. Lastly, the expiration of marketing materials typically refers to a marketing strategy and does not signify the end of an agency relationship unless explicitly tied to the terms of the agreement. Thus, mutual agreement stands as the most concrete way to end an agency relationship.