PSI Virginia Real Estate Practice Exam

What generally causes termination of agency upon expiration?

1. Completion of the purchase contract

2. Failure to sell the property within a specified time frame

3. Agency's desire to refresh marketing strategies

4. Change in property ownership

The correct answer is: Failure to sell the property within a specified time frame

Termination of agency upon expiration typically occurs when there's a failure to sell the property within a specified time frame. In real estate, agency agreements, such as listings, are often established with a clear duration. When this time frame expires without the completion of a sale, the agency relationship automatically comes to an end. This is a natural conclusion of the agreement, as the purpose of the agency was to facilitate a transaction within that set period. Although the completion of the purchase contract, the agency's desire to refresh marketing strategies, and a change in property ownership could also result in the termination of an agency relationship under different circumstances, they are not directly tied to the expiration of the agency agreement as specified in the question. In contrast, failure to sell within the designated timeframe is a straightforward reason that relates directly to the duration specified in agency agreements.